% IR 16. (10 points) What is the major limitation of the current ratio as a measure of liquidity? How may this limitation be overcome? (10 points) True/False. You should always use all of a firm's earnings to compute profitability ratios. Explain. (10 points) Compare and contrast the following companies based on their liquidity ratios: Walmart McDonald's Current Ratio N0 53 Quick Ratio PR: 2.8 . (10 points) Why is net working capital only useful in trend comparisons of overall liquidity whereas the current and quick ratios can be used for both trend and comparative analysis? . (30 points) Last year the Hafele Group had taxable ordinary income of $4.1 million and capital gains income of $400,000. The company also had $445,000 in dividend income and paid its stockholders $150,000 in dividends. Calculate the Hafele Group's total taxable income. What are the firm's earnings after taxes if the Lanier Group pays a 21% average tax rate, . (10 points) Show where the Hafele Group's earnings after taxes end up on the balance sheet. What are the three things the Hafele Group can do with its earnings