Answer:
a. net working capital (current year) = $1,170,000
net working capital (previous year) = $800,000
b. current ratio (current year) = 2.3
current ratio (previous year) = 2
c. quick ratio (current year) = 1.91
quick ratio (previous year) = 1.66
Explanation:
net working capital = current assets - current liabilities
current assets = $2,070,000, $1,600,000
current liabilities = $900,000, $800,000
net working capital (current year) = $2,070,000 - $900,000 = $1,170,000
net working capital (previous year) = $1,600,000 - $800,000 = $800,000
current ratio = current assets / current liabilities
current ratio (current year) = $2,070,000 / $900,000 = 2.3
current ratio (previous year) = $1,600,000 / $800,000 = 2
quick ratio = (current assets - inventory) / current liabilities
inventory = $351,900, $272,000
quick ratio (current year) = ($2,070,000 - $351,900) / $900,000 = 1.91
quick ratio (previous year) = ($1,600,000 - $272,000) / $800,000 = 1.66
