Refer to the Sparrow Sporting Goods Company data in Short Exercise 3-17. At March 31, 2012, Sparrow

Question:

Refer to the Sparrow Sporting Goods Company data in Short Exercise 3-17.
At March 31, 2012, Sparrow Sporting Goods Company’s current ratio was 1.61 and their debt ratio was 0.53. Compute Sparrow’s (a) net working capital (b) current ratio and (c) debt ratio after each of the following transactions (all amounts in thousands, as in the Sparrow financial statements):
1. Sparrow earned revenue of $10,000 on account.
2. Sparrow paid off of $10,000.
When calculating the revised ratios, treat each of the above scenarios independently. Round ratios to two decimal places.

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