### Evaluate the current and quick ratios

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##### Reference no: EM13197727

Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10:

 Edison Stagg Thornton Cash \$4,000 \$2,500 \$1,000 Short-term investments 3,000 2,500 2,000 Accounts receivable 2,000 2,500 3,000 Inventory 1,000 2,500 4,000 Prepaid expenses 800 800 800 Accounts payable 200 200 200 Notes payable: short-term 3,100 3,100 3,100 Accrued payables 300 300 300 Long-term liabilities 3,800 3,800 3,800
1. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?

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