Overton Pty Ltd is a private company that runs a coffee shop. Its owner, Carl, is concerned that the cash flows for the past year have deteriorated and has provided the following abridged versions of Overton Pty Ltd’s balance sheet and statement of cash flows.

	Overton Pty Ltd Balance Sheet as at 30 June
		2017			2016
	Current assets Non-current assets	$	620 000 3 760 000			$	640 000 3 780 000
	Total assets		4 380 000				4 420 000
	Current liabilities Non-current liabilities		380 000 3 120 000				320 000 3 160 000
	Total liabilities		3 500 000				3 480 000
	Net assets	$	880 000			$	940 000
	Equity	$	880 000			$	940 000

	Overton Pty Ltd Statement of Cash Flows for the years ended 30 June
		2017			2016
	Cash flows from operations Cash flows from investing Cash flows from financing	$	220 000 (60 000 (40 000	) )		$	360 000 (40 000 (50 000	) )
	Net increase in cash Beginning cash		120 000 320 000				270 000   50 000
	Ending cash		440 000				320 000

Required

Calculate the short-term cash flow adequacy ratio and the cash flow adequacy ratio for 2016 and 2017 and comment on Overton Pty Ltd’s ability to meet its current and overall obligations to creditors.