Q1) Liquidity management Bauman Company's total current assets, total current liabilities, and inventory for each of the past 4 years follow: Item 2009 2010 2011 2012 Total current assets $16,950 $21,900 $22,500 $27,000 Total current liabilities $9000 $12600 $12600 $17400 Inventory 6000 6900 6900 7200
a. Calculate the firm's current and quick ratios for each year. Compare the resulting time series for these measures of liquidity.
b. Comment on the firm's liquidity over the 2009-2010 period.