E12-33B. (Learning Objective 4: Analyzing the ability to pay current liabilities) Fred 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 20X6. To answer this question, compute the following ratios for 20X6 and 20X5. (Round your answers to two decimal places.)

a. Current ratio

c. Debt ratio

b. Acid-test ratio

d. Times-interest-earned ratio Summarize the results of your analysis in a written report.

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Cash Short-term investments... Net receivables. Inventory......... Prepaid expenses. Total assets..... Total current liabilities........ Long-term debt.......... Income from operations. Interest expense.... 20X6 20X5 27,000 47,000 33,000 4,000 120,000 135,000 238,000 271,000 22,000 8,000 590,000 510,000 187,000 332,000 147,000 84,000 191,000 169,000 41,000 43,000