Focused Photo Shop has asked you to determine whether the company’s ability to pay current liabilities and total liabilities improved or deteriorated during 2025. To answer this question, you gather the following data: 

Compute the following ratios for 2025 and 2024 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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Cash Short-term Investments Net Accounts Receivable Merchandise Inventory Total Assets Total Current Liabilities Long-term Notes Payable Income from Operations Interest Expense 2025 $ 58,000 31,000 110,000 247,000 585,000 255,000 46,000 180,000 52,000 2024 $ 57,000 0 132,000 297,000 535,000 222,000 48,000 153,000 39,000