Sandra Company and Nova Inc. each signed lease agreements on January 1, 2014. Nova€™s lease qualified for capital lease treatment, but Sandra€™s lease did not. All other information for both companies is identical. Payments on each lease were due at the end of each year. The following information is from each company€™s December 31, 2013, financial statements:

Required:
1. Based on this information, what will be the impact of the lease transaction on Nova€™s current ratio and debt-to-equity ratio on January 1, 2014, immediately after signing the lease?
2. What will be the impact on the total asset turnover ratio for 2014?
3. How would Sandra€™s ratio effects differ fromNova€™s?

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Sandra Nova Current assets Total assets Current liabilities Total liabilities Sales 2,000 5.000 2,000 2,500 10,500 2,000 5,000 2,000 2,500 10,500