Debt Management and Short-Term Liquidity Ratios}

The following items appear on the statement of financial position of Figgins Company at the end of 2017 and 2018:

\section*{Required:}
Between 2017 and 2018, indicate whether Figgins's debt-to-equity ratio increased or decreased. Also, indicate whether Figgins's current ratio increased or decreased. Interpret these ratios.

\section*{Cornerstone Exercise

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2018 2017 Current assets $6,000 $3,000 Long-term assets 7,000 4,000 Current liabilities 2,000 3,000 Long-term liabilities 7,000 0 Shareholders' equity 4,000 4,000