# Question

Big Bend Photo Shop has asked you to determine whether the company’s ability to pay current liabilities and total liabilities improved or deteriorated during 2016. To answer this question, you gather the following data:

Compute the following ratios for 2016 and 2015, and evaluate the company’s ability to pay its current liabilities and total liabilities:

a. Current ratio

b. Cash ratio

c. Acid- test ratio

d. Debt ratio

e. Debt to equity ratio

Compute the following ratios for 2016 and 2015, and evaluate the company’s ability to pay its current liabilities and total liabilities:

a. Current ratio

b. Cash ratio

c. Acid- test ratio

d. Debt ratio

e. Debt to equity ratio

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