Using the data on pages 543-544 (see below) in your textbook. 1. Compute the 4 liquidity ratios for Doctors Smith and Brown. 2. What do the liquidity rations mean?

Doctors Smith and Brown
Balance Sheet
March 31, 2___
Assets
Current Assets
Cash and Cash equivalents	$25,000.00
Patient accounts receivable	$40,000.00
Inventories -supplies and drugs	$5,000.00
Total Current Assets		$70,000.00
Property, Plant and Equipment
Buildings and Improvements	$500,000.00
Equipment	$800,000.00
Total	$1,300,000.00
Less Accumulated Depreciation	-$480,000.00
Net Depreciable Assets	$820,000.00
Land	$100,000.00
Property, Plant, and Equipment, Net		$920,000.00
Other Assets		$10,000.00
Total Assets		$100,000.00
Liabilities and Capital
Current Liabilities
Current Maturities of long-term debt	$10,000.00
Accounts Payable and accrued expenses	$20,000.00
Total Current Liabilities		$30,000.00
Long-Term Debt	$180,000.00
Less Current Portion of Long-Term debt	-$10,000.00
Net Long-Term debt		$170,000.00
Total Liabilities		$200,000.00
Capital		$800,000.00
Total Liabilities and Capital		$1,000,000.00
Doctors Smith and Brown
Statement of Changes in Capital
for the Three Months Ended March 31, 2___
Beginning Balance	$720,000.00
Net Income	$80,000.00
Ending Balance	$800,000.00
Doctors Smith and Brown
Statement of Net Income
for the Three Months Ended March 31, 2____
Revenue
Net patient service revenue	$180,000.00
Other revenue	$0.00
Total Operating Revenue		$180,000.00
Expenses
Nursing/PA salaries	$16,650.00
Clerical salaries	$10,150.00
Payroll taxes/ employee benefits	$4,800.00
Medical supplies and drugs	$15,000.00
Professional fees	$3,000.00
Dues and publications	$2,400.00
Janitorial service	$1,200.00
Office supplies	$1,500.00
Repairs and maintenance	$1,200.00
Utilities and telephone	$6,000.00
Depreciation	$30,000.00
Interest	$3,100.00
Other	$5,000.00
Total Expenses		$100,000.00
Income from Operations		$80,000.00
Nonoperating Gains (Losses)
Interest Income		$0.00
Nonoperating Gains, Net		$0.00
Net Income		$80,000.00