Response to the following problem:
Tommy Hilfiger Corp., the fashion apparel company, had the following current assets and current liabilities at the end of two recent years:
March 31, 2004 March 31, 2003
(in millions) (in millions)
Cash and cash equivalents $414.5 $420.8
Temporary investments 27.5 -
Accounts receivable 188.5 185.0
Inventories 206.3 229.7
Deferred tax and other current assets 92.8 80
Short-term borrowings - 19.4
Current portion of long-term debt 0.7 151.9
Accounts payable 32.7 47.8
Accrued expenses and other current liabilities 207.2 185.9
a. Determine the (1) current ratio and (2) quick ratio for both years. Round to two decimal places. Treat the deferred tax and other current assets as nonquick assets.
b. What conclusions can you draw from these data?