PE 11-8A Quick ratio
Grangel Company reported the following current assets and liabilities for December 31, 2012 and 2011:
|
Dec. 31, 2012 |
Dec. 31, 2011 |
|
|
Cash |
$ 620 |
$ 560 |
|
Temporary investments |
1,330 |
1,250 |
|
Accounts receivable |
850 |
830 |
|
Inventory |
1,000 |
1,000 |
|
Accounts payable |
2,800 |
2,200 |
a. Compute the quick ratio for December 31, 2012 and 2011.
b. Interpret the company’s quick ratio. Is the quick ratio improving or declining?