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

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2016 56,000 31,000 134,000 257,000 540,000 285,000 46,000 170,000 54,000 2015 Cash Short-term Investments Net Accounts Receivable Merchandise Inventory Total Assets Total Current Liabilities Long-term Notes Payable Income from Operations Interest Expense 51,000 0 136,000 297,000 550,000 202,000 58,000 178,000 45,000