Brief Exercise 12-62 (Algorithmic) Debt Management and Short-Term Liquidity Ratios

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	$5,440		$2,400
Long-term assets	7,000		3,600
Current liabilities	1,600		2,000
Long-term liabilities	6,840		0
Stockholder's equity	4,000		4,000

Required:

Between 2018 and 2019, indicate whether Magellans debt to equity ratio and current ratio increased or decreased.

Debt to equity ratio
Current ratio