A small audio equipment retailer has just completed the second year of trading. Profits are up, but

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A small audio equipment retailer has just completed the second year of trading. Profits are up, but the manager is slightly concerned. She feels that the firm could face liquidity problems in the near future. The data for this claim are as follows:image text in transcribed

(a) Calculate the current ratio and liquidity ratio based on the above data.

(b) Should the manager be concerned with the liquidity position? Give a balanced argument.

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