Question - Gmeiner Co. had the following current assets and liabilites on December 31 of two recent years:
Current Year Previous Year
Current Assets:
Cash 486,000 500,000
Accounts Receivable 210,000 200,000
Inventory 375,000 350,000
Total Current Assets 1,071,000 1,050,000
Current Liabilities:
Current portion of long-term debt 145,000 110,000
Accounts payable 175,000 150,000
Accrued and other current liabilities 260,000 240,000
Total Current Liabilities 580,000 500,000
a. Determine the quick ratio for December 31 of both years.
b. Interpret the change in the quick ratio between the two balance sheet dates.