Calculate and analyze liquidity measures Following are the current asset and current liability sections of the balance sheets for Calketch, Inc., at August 31, 2014 and 2013 (in millions):
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August 31, 2014
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August 31, 2013
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Current Assets
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Cash
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$18
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$36
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Marketable Sec
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$42
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$60
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AR
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$78
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$48
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Inventories
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$108
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$48
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Total Current Assets
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$246
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$192
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Current Liabilities
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NP
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$18
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$48
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AP
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$60
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$84
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Other Current Liabilities
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$54
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$42
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Total Current liabilities
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$132
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$174
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Required:
a. Calculate the working capital and current ratio at each balance sheet date.
Round your current ratio answers to two decimal places.
Working Capital = Current Assets less Current Liabilities.
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August 31, 2014
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August 31, 2013
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CA
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CL
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WC
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Cuurent Ratio = CA/CL
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CA
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CL
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ratio
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b. Describe the change in the firm's liquidity from 2013 to 2014.