PE 10-8B Quick ratio
Adieu Company reported the following current assets and liabilities for December 31,
2014 and 2013:
|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
|
Cash |
$1,000 |
$1,140 |
|
Temporary investments |
1,200 |
1,400 |
|
Accounts receivable |
800 |
910 |
|
Inventory |
2,200 |
2,300 |
|
Accounts payable |
1,875 |
2,300 |
a. Compute the quick ratio for December 31, 2014 and 2013.
b. Interpret the company’s quick ratio. Is the quick ratio improving or declining?