Current Ratio EVANS and Sons, Inc. Income Statement (in millions) 2019 2018 Net sales $9,800 $9,300 Cost of goods sold (5,500) (5,200) Gross profit 4,300 4,100 Selling and administrative expenses (2.800) (2,700) Income from operations 1,500 1,400 Interest expense (300) (250) Income before income taxes 1,200 1,150 Income tax expense (220) (200) Net income $980 $950 EVANS and Sons, Inc. Balance Sheet (in millions) 2019 2018 Assets Current assets Cash and cash equivalents $100 5300 Accounts receivable 900 Inventory 500 650 Other current assets 400 250 Total current assets 1,900 2,000 Property, plant & equipment, net 2,600 2,500 Other assets 5,700 5.900 Total Assets $10,200 $10,400 Liabilities and Stockholders' Equity Current liabilities $3,000 $2,900 Long-term liabilities 5,000 5,400 Total liabilities 8,000 8,300 Stockholders' equity-common 2,200 2,100 Total Liabilities and Stockholders' Equity 510,200 $10,400 Calculate the current ratio for Evans & Sons, Inc., for 2018 and 2019. Round answers to two decimal places. 800 2018 2015 Did the company's ability to pay its current liabilities improve over the two years? The decrease in ratio indicates that Evans & Son's ability to pay its current liabilities improved The increase in ratio indicates that Evans & Son's ability to pay its current liabilities declined. The decrease in ratio indicates that Evans & Son's ability to pay its current liabilities declined. The increase in ratio indicates that Evans & Son's ability to pay its current liabilities improved. Check