Emma jones company has the following information available: account 12/31/2019 12/31/2018 accounts payable $76,500 $80,000 accounts receivable, net 42,300 49,000 cash and cash equivalents 43,700 70,000 inventories 100,000 99,000 longminusterm investments 20,000 100,000 shortminusterm investments 27,000 44,000 income taxes payable 2,000 5,000 longminusterm notes payable 20,000 30,000 did the quick ratio improve from 2018 to 2019? a. yes. b. no. c. it stayed the same. d. there is not enough information.

B. No.

Explanation:

The formula to compute the quick ratio is shown below:

Quick ratio = (Quick assets) ÷ (current liabilities)

where,

For 2018

Quick assets = Accounts Receivable, net  + Cash and Cash Equivalents + Short minus Term Investments

= $49,000 + $70,000 + $44,000

= $163,000

And, the current liabilities = Accounts Payable +  Income Taxes Payable

                                           =  $80,000 + 5,000

                                           = $85,000

Now put these values to the above formula  

So, the ratio would equal to

= $163,000 ÷ $90,000

= 1.81 times

For 2019

Quick assets = Accounts Receivable, net  + Cash and Cash Equivalents + Short minus Term Investments

= $42,300 + $43,700 + $27,000

= $113,000

And, the current liabilities = Accounts Payable +  Income Taxes Payable

                                           =  $76,500 + 2,000

                                           = $78,500

Now put these values to the above formula  

So, the ratio would equal to

= $113,000 ÷ $78,500

= 1.43 times

No, as it shows declining from 2018 to 2019

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