Calculate and analyze financial ratios. (LO 3)

The information given in P10-4B was taken from Radio Shack's financial statements. Even though you did not study all of the items on the statements, you should recognize most of them.

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a. Calculate the following ratios for 2005 .

1. Current ratio 2. Acid-test ratio 3. Working capital 4. Accounts receivable turnover ratio (Assume all sales are credit sales.)

5. Debt-to-equity ratio 6. Times-interest-earned ratio 7. Return on equity

b. Notice that Radio Shack provides a vertical analysis of the income statement. Comment on the changes between the 2 years shown.