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The current portion of a company's balance sheets for the past three years are as...

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Accounting

The current portion of a company's balance sheets for the past three years are as follows:

20Y1

20Y2

20Y3

Cash

$ 97

$ 154

$110

Accounts receivable

885

770

785

Inventory

1,020

902

1,075

Other current assets

23

44

40

Total current assets

$ 2,025

$ 1,870

$ 2,010

Notes payable

490

486

592

Current portion LTD

68

66

62

Accounts payable

551

528

473

Accrued expenses

155

143

136

Other current liabilities

117

99

91

Total current liabilities

$ 1,381

$ 1,322

$ 1,354

Which of the following best describes the company's liquidity over the past three years?

The companys liquidity indicators remained relatively stable over the three year period. The companys liquidity indicators were mixed as the quick ratio improved but the current ratio declined over the three year period. The companys current ratio and quick ratio improved over the three year period indicating strong liquidity. The companys working capital position and quick ratio declined to their lowest points in 20Y3 indicating weakening liquidity.

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