Suppose the balance sheets of a corporation for two years reported these figures:

The notes to the 2020 financial statements report that because of some refinancing arrangements, the corporation was able to reclassify $7 million from current liabilities to long-term liabilities during 2020.

Required
1. Compute the corporation's current ratio (current assets \(\div\) current liabilities) at the end of each year. Describe the change between the years that you observe.
2. Suppose that the corporation had not refinanced and not been able to reclassify the \(\$ 7\) million of current liabilities as long term during 2020. Recalculate the current ratio for 2020 to include the \(\$ 7\) million. Why do you think the corporation decided to reclassify the liabilities as long term?

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Millions 2020 2019 Total current assets $24.50 $22.92 Property, plant, and equipment, net 44.74 40.96 Total assets $69.24 $63.88 Total current liabilities $11.66 $15.12 Long-term liabilities 29.92 23.32 Shareholders' equity 27.66 25.44 Total liabilities and shareholders' equity $69.24 $63.88