Calculate and analyze financial ratios. (LO 3)

The following information was taken from the 2008 annual report of Presentations.

\section*{Required}

a. Calculate the following ratios for 2008 and 2007 whenever possible.
1. Debt-to-equity ratio 2. Gross margin percentage 3. Current ratio 4. Acid-test ratio 5. Times-interest-earned ratio

b. What do the ratios indicate about the success of Presentations? What additional information would help you analyze the overall performance of this company?

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ASSETS 2008 At December 31, (in thousands) 2007 Current assets Cash $ 1,617 $1,220 Accounts receivable 1,925 3,112 Merchandise inventory 2,070 966 Prepaid expenses 188 149 Total current assets 5,800 5,447 Plant and equipment: Buildings, net $ 4,457 $2,992 Equipment, net 1,293 1,045 Total plant and equipment $ 5,750 $4,037 Total assets $11,550 $9,484 LIABILITIES