The initial analysis should include the following:

• The ratio equation
• The calculation of the ratio using the equation and the pre-assigned Quick Study or Exercise from the textbook. (See below)
• Use the result in a sentence; i.e. For every dollar invested in assets the company is earning 22.4 cents or 22.4% in net income.
• Then explain whether this is a good result or a result that needs improving.

Use the following adjusted trial balance at December 31 of Wilson Trucking Company to prepare the (1) income statement and (2) statement of owner's equity, for the year ended December 31. The K. Wilson, Capital account balance was $170,000 at December 31 of the prior year, and there were no owner investments during the current year. \begin{tabular}{|c|c|c|} \hline Account Title & Debit & Credit \\ \hline Cash & $8,000 & \\ \hline Accounts receivable & 17,500 & \\ \hline Office supplies & 3,000 & \\ \hline Trucks & 172,000 & \\ \hline Accumulated depreciation-Trucks & & $36,000 \\ \hline Land & 85,000 & \\ \hline Accounts payable & & 12,000 \\ \hline Interest payable & & 4,000 \\ \hline Long-term notes payable & & 58,000 \\ \hline K. Wilson, Capital & & 170,000 \\ \hline K. Wilson, Withdrawals & 20,000 & \\ \hline Trucking revenue & & 130,000 \\ \hline Depreciation expense-Trucks & 23,500 & \\ \hline Salaries expense & 61,000 & \\ \hline Office supplies expense & 8,000 & \\ \hline Interest expense & 12,000 & \\ \hline Totals & $410,000 & $410,000 \\ \hline \end{tabular} Exercise 4-14 Computing the current ratio A1 (a) Use the information in the adjusted trial balance reported in Exercise 4-11 to compute the current ratio for Wilson Trucking. (b) Assuming Spalding (a competitor) has a current ratio of 1.5 , which company is better able to pay its short-term obligations