The following accounting information exists for Aspen and Willow companies at the end of 2012.

Required

a. Identify the current assets and current liabilities and compute the current ratio for each company.

b. Assuming that all assets and liabilities are listed here, compute the debt to assets ratios for each company.

c. Determine which company has the greater financial risk in both the short term and the long term.

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Aspen Willow Cash Wages payable Merchandise inventory $ 30,000 $ 20,000 30,000 25,000 65,000 35,000 Building 95,000 95,000 Accounts receivable 35,000 40,000 Long-term notes payable 145,000 110,000 Land 60,000 55,000 Accounts payable 55,000 50,000 Sales revenue 325,000 265,000 Expenses 295,000 230,000