Management Accounting

This assignment is due Tuesday, May 2nd. Below is one of the seven accounting questions I need help with:

Big Time Picture Frames has asked you to determine whether the company's ability to pay current liabilities and total liabilities improved or deteriorated during 2009. To answer this question, you gather the following data:

______________________________________________2009__________2008

Cash                                                                             $52, 000       51, 000

Short-term investments                                                  30,000              --

Net receivables                                                             110,000         120, 000

Inventory                                                                       217,000        262,000

Total assets                                                                  540,000         490,000

Total current liabilities                                                    265,000         202,000

Long-term note payable                                                 44,000           54,000

Income from operations                                                 165,000         153,000

Interest expense                                                            44,000          37,000 

Requirement

1. Compute the following ratios for 2009 and 2008:

    a. Current ratio

    b. Acid-test ratio

    c. Debt ratio

    d. Times-interest-earned ratio

a. Calculate the current ratio for both years. (Round your answers to two decimal places.)

2009: nothing

2008: nothing