$[05-3,$L$05-45\mathrm{.}14$ Calculating and Interpreting Risk Ratios. Refer to the financial statement data for Abercrombie & Fitch in Problem $4\mathrm{.}25$ in Chapter $4.$ Exhibit $5\mathrm{.}15$ presents risk ratios for Abercrombie & Fitch for fiscal Year $3$ and Year $4.$

Exhibit $5\mathrm{.}15$

Risk Ratios for Abererombie & Fitch

$($Problem $5\mathrm{.}14)$

$\backslash$table$[[,$Year $5,$Year $4,$Year $3],[$Current ratio,,$2\mathrm{.}4,2\mathrm{.}3],[$Quick ratio,,$1\mathrm{.}7,1\mathrm{.}6],[$Operating cash flow to current liabilities ratio,,$1\mathrm{.}177,1\mathrm{.}587],[$Days accounts receivable outstanding,,$2,4],[$Days inventory held,,$72,61],[$Days accounts payable outstanding,,$26,22],[$Net days of working capital financing needed,,$48,43],[$Liabilities to assets ratio,,$0\mathrm{.}591,0\mathrm{.}592],[$Liabilities to shareholders' equity ratio,,$1\mathrm{.}443,1\mathrm{.}448],[$Long$-$term debt to long$-$term capital ratio,,$0\mathrm{.}454,0\mathrm{.}461],[$Long$-$term debt to shareholders' equity ratio,,$0\mathrm{.}831,0\mathrm{.}855],[$Operating cash flow to total liabilities ratio,,$0\mathrm{.}298,0\mathrm{.}380],[$Interest coverage ratio,,$7\mathrm{.}2,7\mathrm{.}6]]$

REQUIRED

a$.$ Compute these ratios for fiscal Year $5.$

b$.$ Assess the changes in the short$-$term liquidity risk of Abercrombie & Fitch between fiscal Year $3$ and fiscal Year $5$ and the level of that risk at the end of fiscal Year $5.$

c$.$ Assess the changes in the long$-$term solvency risk of Abercrombie & Fitch between fiscal Year $3$ and fiscal Year $5$ and the level of that risk at the end of fiscal Year $5.$