This assignment is due Tuesday May 2nd. Below is one of the seven accounting questions I need help with:
Big Time Picture Frames has asked you to determine whether thecompany’s ability to pay current liabilities and total liabilities improved or deteriorated during 2009. To answer thisquestion you gather the followingdata:
______________________________________________2009__________2008
Cash $52 000 51 000
Short-term investments 30000 —
Net receivables 110000 120 000
Inventory 217000 262000
Total assets 540000 490000
Total current liabilities 265000 202000
Long-term note payable 4400054000
Income from operations 165000 153000
Interest expense 4400037000
Requirement
1. Compute the following ratios for 2009 and2008:
a. Current ratio
b. Acid-test ratio
c. Debt ratio
d. Times-interest-earned ratio
a. Calculate the current ratio for both years. (Round your answers to two decimalplaces.)
2009: nothing
2008: nothing

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