For Garrison Corporation, the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year, reported as follows:?? Has the current position of Garrison Corporation improved? Explain.

The amount of working capital and the change in working capital are just two indicators of the strength of the current position. A comparison of the current and quick ratios, along with the amount of working capital, gives a better analysis of the current position.​​ Although working capital has increased, the current ratio has fallen from 2.5 to 2.0, and the quick ratio has fallen from 1.4 to 0.8.​Reductions in the current and quick ratios imply that it has become difficult for the company to convert its assets into cash to pay off its short-term liabilities, so the current position has deteriorated.