Determine the quick ratio for December

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Problem - Quick ratio - CCB Co. had the following current assets and liabilities for two comparative years:

 

Dec. 31, 2012

Dec. 31, 2011

Current assets:



Cash

$ 506,000

$ 524,000

Accounts receivable

354,000

364,000

Inventory

240,000

200,000

Total current assets

$1,100,000

$1,088,000

Current liabilities:



Current portion of long-term debt

$ 160,000

$ 120,000

Accounts payable

265,000

220,000

Accrued and other current liabilities

435,000

400,000

Total current liabilities

$ 860,000

$ 740,000

Required -

a. Determine the quick ratio for December 31, 2012 and 2011.

b. Interpret the change in the quick ratio between the two balance sheet dates.

Reference no: EM132682431

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