SHORT-TERM LIQUIDITY RATIOS
Below are three ratios calculated for Huey, Louie, and Dewey Companies for 2008 and 2009.
|
(In millions)
|
|
Huey
|
Louie
|
Dewey
|
|
Current ratio
|
12/31/09
|
2.8 to 1
|
2.3 to 1
|
1.8 to 1
|
|
|
12/31/08
|
2.0 to 1
|
1.5 to 1
|
2.2 to 1
|
|
Inventory turnover ratio
|
12/31/09
|
6.9 times
|
5.8 times
|
8.0 times
|
|
|
12/31/08
|
7.6 times
|
5.8 times
|
9.6 times
|
|
Quick ratio
|
12/31/09
|
2.5 to 1
|
2.1 to 1
|
0.5 to 1
|
|
|
12/31/08
|
1.0 to 1
|
1.4 to 1
|
1.2 to 1
|
Required:
Explain which company appears to be the most liquid.