Sigma Designs repaid much of its long-term debt between January 31, 1994 and January 31, 1995. Its liabilities and stockholders’equity at January 31 were as follows (dollars in thousands):

1995 1994 Total current liabilities $13,564 $ 8,622 Total long-term liabilities 1,102 1,518 Total shareholders’ equity 18,721 16,499 Total liabilities and equity $33,387 $26,639 Required

a. Calculate Sigma Designs’ debt and equity composition ratios (vertical analysis).

b. Using only the information shown above, what does this evidence say, pro and con, about Sigma Designs’ability to meet its liabilities? Would this suggest a high or low likelihood of bankruptcy? Why?

c. What other information would be helpful in assessing the firm’s liquidity? Its default risk?