A company's balance sheet at December 31, 2018, 2019, and 2020 and income statement for the years ended December 31, 2018, 2019, and 2020 include the data on pages \(168-169\)

Requirements

Use the years of data to answer the following:

1. Calculate the current ratio for 2018,2019 , and 2020 .

2. Calculate the debt ratio for 2018,2019 , and 2020 3. Evaluate each ratio and determine if the ratio has improved or deteriorated over the three years. Explain what the changes mean.

Transcribed Image Text:

Assets Current assets Cash... Accounts receivable. Total current assets..... Furniture and equipment, net Total assets Liabilities Current liabilities Accounts payable....... Salaries payable. Total current liabilities. Notes payable. Total liabilities.. Balance Sheet As at December 31 (in thousands) 2020 2019 2018 $ 6.0 $ 4.0 3.5 11.0 8.0 6.5 170 12.0 20.0 19.0 12.5 6.0 $36.0 $24,5 $16.0 $ 8.0 $ 7.0 $ 6.0 +5 4.11 3.5 12.5 11.0 9.5 12.0 5.0 5.5 245 170 15.0 Shareholders' equity Shareholcers equity. 11.5 7.5 1.0 Total liabilities and shareholders' equity $36.0 $24.5 $16.0