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Current Position Analysis
The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:
| | Current Year | | Previous Year |
| Current assets: | | | | | |
| Cash | $348,800 | | | $281,600 | |
| Marketable securities | 403,900 | | | 316,800 | |
| Accounts and notes receivable (net) | 165,300 | | | 105,600 | |
| Inventories | 706,900 | | | 456,300 | |
| Prepaid expenses | 364,100 | | | 291,700 | |
| | Total current assets | $1,989,000 | | | $1,452,000 | |
| Current liabilities: | | | | | |
| Accounts and notes payable | | | |
| | (short-term) | $295,800 | | | $308,000 | |
| Accrued liabilities | 214,200 | | | 132,000 | |
| | Total current liabilities | $510,000 | | | $440,000 | |
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
| | | | Current Year | | | Previous Year |
| 1. Working capital | $fill in the blank 1 | $fill in the blank 2 |
| 2. Current ratio | fill in the blank 3 | fill in the blank 4 |
| 3. Quick ratio | fill in the blank 5 | fill in the blank 6 |
b. The liquidity of Albertini has
improved or declined
from the preceding year to the current year. The working capital, current ratio, and quick ratio have all
increased or decreased
. Most of these changes are the result of an
increase or decrease
in current assets relative to current liabilities.
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