Calculate and analyze liquidity measures Following are the current asset and current liability sections of the balance sheets for Calketch, Inc., at August 31, 2011 and 2010 (in millions):
| August 31, 2011 | August 31, 2010 |
Current Assets |
|
|
Cash | $ 12 | $ 24 |
Marketable securities | 28 | 40 |
Accounts receivable | 52 | 32 |
Inventories | 72 | 32 |
Total current assets | $164 | $128 |
Current Liabilities |
|
|
Note payable | $ 12 | $ 32 |
Accounts payable | 40 | 56 |
Other accrued liabilities | 36 | 28 |
Total current liabilities | $ 88 | $ 116 |
Required:
a.Calculate the working capital and current ratio at each balance sheet date. Round your current ratio answers to two decimal places.
b. Describe the change in the firm’s liquidity from 2010 to 2011.
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