LA Furniture Company has requested that you determine whether the companys ability to pay its current liabilities

LA Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2014. To answer this question, compute the following ratios for 2014 and 2013:

a. Working capital

b. Current ratio

c. Quick (acid-test) ratio

d. Debt ratio

e. Times-interest-earned ratio

Use Exhibit 13-8 as a model. Round your answers to two decimal places. Summarize the results of your analysis in a shortparagraph.

Transcribed Image Text:

2014 2013 Cash $ 51,000 S 47,000 28,000 27,000 114,000 126,000 236,000 265,000 22,000 8,000 518,000 535,000 224,000 262,000 97,000 174,000 Income from operations... 261,000 150,000 41,000 42,000 Net receivables Inventory Prepaid expenses Total assets Total current liabilities Long-term deb.. Interest expense