The current ratio shows the current assets, divided by its current liabilities.
In quick ratio cash equivalents or only highly liquid cash is taken into account explicitly as current assets
Divided by current liabilities, the current ratio represents current assets.
Only highly liquid assets or cash equivalents are taken into account as current assets in the quick ratio.
Current assets
For Year 1 = 9,096 + 2,913 + 6,437 + 2,720 + 1,865 = $ 23,031.00
For Year 2 = 6,134 + 2,592 + 6,651 + 3,143 + 2,143 = $ 20,663.00
Current Liabilities
Year 1 = 4,071 + 13,507 = $ 17,578.00 Year 2 = 5,076 + 13,016
= $ 18,092.00
Current ratio
Year 1 = $ 23,031.00/$ 17,578.00= 1.3 ( to 1 decimal place)
Year 2 = $ 20,663.00/$ 18,092.00
= 1.1
Quick ratio Year 1 = (23,031.00 - 2,720 - 1,865)/ 17,578.00
= 1.0 to 1 decimal place
Year 2 = (20,663.00 - 3,143 - 2,143)
= 0.8
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