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Acc350 Managerial Accounting ED-21 Analyzing the ability to pay liabilities Large Land Photo Shop has asked you to determine whether the company's

Acc350 Managerial Accounting

ED-21 Analyzing the ability to pay liabilities

Large Land Photo Shop has asked you to determine whether the company’s ability to pay current liabilities and total liabilities improved or deteriorated during 2015. Analyzing a company for its investment potential

To answer this question, you gather the following data:

20152014

Cash58,00057,000 

Short-term investments31,000

Net receivables110,000132,000 

Inventory247,000297,000 

Total assets585,000535,000 

Total current liabilities255,000222,000 

Long-term note payable46,00048,000 

Income from operations180,000153,000 

Interest expense52,00039,000 


1.  Compute the following ratios for 2015 and 2014:

a.  Current ratio

b.  Acid-test ratio

c.  Debt ratio

d.  Debt to equity ratio


PLEASE EXPLAIN YOUR ANSWER STEP BY STEP AND I'LL REWARD FULL POINTS

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a.current ratio=current assets/current liabilities. 2015=446000/255000 =1.75 2014=486000/222000 =2.19 b.Acid-test... View the full answer

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