Underwood Boutique reported the following financial data for 2017 and 2016.

Instructions

(a) Calculate the current ratio for Underwood Boutique for 2017 and 2016.

(b) Suppose that at the end of 2017, Underwood Boutique used $1.5 million cash to pay At September 30, Underwood Boutique has an undrawn operating line of credit of $12.5 million. Would this affect any assessment that you might make of Underwood Boutique's short-term liquidity? Explain.
(coe $1.5 million of accounts payable. How would its current ratio change?

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UNDERWOOD BOUTIQUE Balance Sheet (partial) September 30 (in thousands) 2017 2016 Current assets Cash and short-term deposits $2,574 $1,021 Accounts receivable 2,147 1,575 Inventories 1,201 1,010 Other current assets 322 192 Total current assets $6,244 $3,798 Current liabilities $4,503 $2,619