Magellan Company is an international travel agency providing travel planning services to customers in over 20 countries. Recently, the travel industry has been experiencing volatility as a result of increases in oil prices. Magellan's investors have been following its financial information closely to determine its ability to continue as a going concern. Its investors have used the following information to determine financial ratios:
_______________________________ 2019 __________ 2018
Current assets ............................ $5,000 .............. $3,600
Long-term assets ......................... 6,000 ................ 3,900
Current liabilities ......................... 1,500 ................. 2,200
Long-term liabilities ..................... 5,000 ...................... 0
Stockholders' equity ..................... 3,900 ................ 3,900
Required:
Between 2018 and 2019, indicate whether Magellan's debt to equity ratio increased or decreased.
Also, indicate whether Magellan's current ratio increased or decreased. Interpret these ratios?