Determine the quick ratio for december

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Reference no: EM13529525

Urban-Wear Clothes Co. had the following current assets and liabilities for two comparative years:

 

Dec. 31, 2008

Dec. 31, 2007

Current assets:

 

 

Cash

$140,000

$205,000

Accounts receivable

250,000

245,000

Inventory

300,000

180,000

Total current assets

$690,000

$630,000

Current liabilities:

 

 

Current portion of long-term debt

$ 50,000

$ 50,000

Accounts payable

200,000

190,000

Accrued expenses payable

140,000

135,000

Total current liabilities

$390,000

$375,000

a. Determine the quick ratio for December 31, 2008 and 2007.

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

Reference no: EM13529525

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