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E4-38. Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet and income statement information from Verizon Communications Inc. for 2012 and 2011 follows ($
E4-38. Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet and income statement information from Verizon Communications Inc. for 2012 and 2011 follows ($ millions). LO9 Verizon Communications Inc. (UZ) Income Total Total Before Interest Current Current Interest Expense, Assets Liabilities and Taxes Gross 2015......$22,280 $35,052 $32,974 $4,920 $226,798 $17,842 2014...... 29,499 27,987 21,379 4,915 218,940 13,676 Total Liabilities Stockholders' Equity a.Compute the current ratio for each year and discuss any trend in liquidity. Do you believe the com- pany is sufficiently liquid? Explain. What additional information about the accounting numbers comprising this ratio might be useful in helping you assess liquidity? Explain. b.Compute times interest earned and the liabilities-to-equity ratio for each year and discuss any no- ticeable change. c. What is your overall assessment of the company's liquidity and solvency from the analyses in parts a and b? Explain
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