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Current Position Analysis
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
| | Current Year | | Previous Year |
| Current assets: | | | | | |
| Cash | $627,000 | | | $494,000 | |
| Marketable securities | 726,000 | | | 555,800 | |
| Accounts and notes receivable (net) | 297,000 | | | 185,200 | |
| Inventories | 544,500 | | | 277,500 | |
| Prepaid expenses | 280,500 | | | 177,500 | |
| | Total current assets | $2,475,000 | | | $1,690,000 | |
| Current liabilities: | | | | | |
| Accounts and notes payable | | | |
| | (short-term) | $435,000 | | | $455,000 | |
| Accrued liabilities | 315,000 | | | 195,000 | |
| | Total current liabilities | $750,000 | | | $650,000 | |
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 | $ | $ |
| 2. Current ratio | | |
| 3. Quick ratio | | |
Answer & Explanation
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