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Delamy Design Ltd. is a clothing designer, marketer, and distributor. The company reported the following in recent balance sheets (amounts in thousands): Assets Current
Delamy Design Ltd. is a clothing designer, marketer, and distributor. The company reported the following in recent balance sheets (amounts in thousands): Assets Current Assets: Cash September 30, 2017 December 31, 2016 $ 75,924 Accounts Receivable 83,416 $ 95,562 60,350 Inventories 27,506 22,130 Other Current Assets 6,292 5,782 Total Current Assets 193,138 183,824 Property, Equipment, and Other Long-term Assets 58,028 29,070 Total Assets $251,166 $212,894 Liabilities and Shareholders' Equity Current Liabilities: Accounts Payable Other Current Liabilities Income Taxes Payable Total Current Liabilities Long-Term Liabilities Shareholders' Equity $ 20,507 13,530 4,812 $ 19,994 12,583 38,849 3,009 209,308 32,577 962 179,355 Total Liabilities and Shareholders' Equity $251,166 $212,894 Required: 1. Calculate the current ratio at September 30, 2017, and December 31, 2016. (Round your answers to 2 decimal places.) September 30, 2017 December 31, 2016 Current ratio 2-a. Did the company's current ratio increase or decrease? Decrease O Increase 2-b. What does this imply about the company's ability to pay its current liabilities as they come due? Reduced ability to pay current liabilities. O Increased ability to pay current liabilities. 3. What would Delamy's current ratio have been if, on September 30, 2017, the company was to have paid down $10,500 of its Accounts Payable? (Round your answer to 2 decimal places.) Current ratio 4. Are the company's total assets financed primarily by liabilities or shareholders' equity at September 30, 2017? O Shareholders' equity O Liabilities
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