Response to the following problem:
The following data were taken from the balance sheet of Marine Equipment Company
Dec. 31, 2007 Dec. 31, 2006
Cash $118,000 $ 95,000
Marketable securities 152,000 131,000
Accounts and notes receivable (net) 210,000 198,000
Inventories 345,000 326,000
Prepaid expenses 50,000 45,000
Accounts and notes payable (short-term) 190,000 208,000
Accrued liabilities 60,000 57,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round to one decimal place.
b. What conclusions can be drawn from these data as to the company's ability to meet its currently maturing debts?