EX 10-22 Quick ratio
Gmeiner Co. had the following current assets and liabilities for two comparative years:
|
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, 2014 and 2013.
b. Interpret the change in the quick ratio between the two balance sheet dates.