The following balance sheet dated December 31, 2017, is available for Catchacoma Inc. 

Assets 

Cash $ 50,000 

Marketable securities 120,000 

Accounts receivable 250,000 

Inventory 150,000 

Equipment 300,000 

Total assets $870,000 

Liabilities and shareholders' equity 

Accounts payable $120,000 

Salary payable 10,000 

Bonds payable 350,000 

Common shares 200,000 

Retained earnings 190,000 

Total liabilities and shareholders' equity $870,000 

Additional information: ∙ 

Net income for 2017 was $160,000. ∙ 

Dividends paid during 2017 amounted to $2 per share. ∙

 No additional shares of stock were issued during the year. ∙ 

The shares were issued for $5 each ∙

 The price/earnings ratio was 20. 

Calculate for the year ended December 31, 2017: 

a. current ratio b. acid-test ratio c. debt ratio

Industry bench marks: 

current ratio 1.90 acid test 1.50 debt ratio .80 

Based upon your calculations comment on the business’s ability to pay their current liabilities