Analyzing the Numbers The following ratios and other information are based on a company’s comparative financial statements for a two-year period:

a. What is the amount of current liabilities at the end of Nea

b. What is the amount of total debt at the end of Year 2?

c. What is total equity at the end of Year 2?

d. Do you think this company is a merchandising or manufacturing company, a financial institution, or a service organization? Why?

e. If the company has 58,905,230 shares of common stock outstanding for all of Year 2 and has issued no other stock, what is its net income for Year 2?

f. Based on the information available, what is your assessment of the company’s liquidity? Explain. Given the limited information, what is your assessment of the company’s overall financial position? Explain.
g. What changes do you see between Year | and Year 2 that appear particularly significant? What explanation might there be for these changes?

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Year 1 Year 2 Current ratio 1.74 1.28 Quick ratio .89 .44 Debt-to-assets ratio .60 .88 Debt-to-equity ratio 1.52 7.33 Earnings per share 1.65 .51 Gross profit percentage 37% 35% Total assets $1,825,109 $6,258,089 Current assets $1,302,206 $3,105,439