(Learning Objective 5: Using the current ratio and days’ sales in receivables to evaluate a company) Navajo, Inc., reported the following items at December 31, 20X6 and 20X5:

❙ Requirement 1. Compute Navajo’s

(a) current ratio and

(b) days’ sales in average receivables for 20X6.

Evaluate each ratio value as strong or weak. Navajo sells on terms of net 30 days.