ACT5725

Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information from Verizon Communications follows.

($ millions)	2005	2004
Current assets	$ 16,448	$ 19,479
Current liabilities	25,063	23,129
Total debt	39,010	39,267
Total liabilities	101,696	103,345
Equity	66,434	62,613
Earnings before interest and taxes	12,787	12,496
Interest expense	2,180	2,384
Net cash flow from operating activities	$ 22,012	$ 21,820

(a) Compute the current ratio for each year and discuss any trend in liquidity. (Round your answers to two decimal places.) 2005 current ratio

2004 current ratio