Grangel Company reported the following current assets and liabilities for December 31, 2012 and 2011:
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Cash
|
$ 620
|
$ 560
|
|
Temporary investments
|
1,330
|
1,250
|
|
Accounts receivable
|
850
|
830
|
|
Inventory
|
1,000
|
1,000
|
|
Accounts payable
|
2,800
|
2,200
|
a. Compute the quick ratio for December 31, 2012 and 2011.
b. Interpret the company's quick ratio. Is the quick ratio improving or declining?