1. Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10:

	Edison		Stagg		Thornton
Cash	$6,000	$5,000		$4,000
Short-term investments	3,000	2,500		2,000
Accounts receivable	2,000	2,500		3,000
Inventory	1,000	2,500		4,000
Prepaid expenses	800	800		800
Accounts payable	200	200		200
Notes payable: short-term	3,100	3,100		3,100
Accrued payables	300	300		300
Long-term liabilities	3,800	3,800		3,800

1. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?

2. Computation and evaluation of activity ratios. The following data relate to Alaska Products, Inc:
	20X5		20X4
Net credit sales	$832,000	$760,000
Cost of goods sold	530,000	400,000
Cash, Dec. 31	125,000	110,000
Average Accounts receivable	205,000	156,000
Average Inventory	70,000	50,000
Accounts payable, Dec. 31	115,000	108,000
Instructions Compute the accounts receivable and inventory turnover ratios for 20X5. Alaska rounds all calculations to two decimal places.

3. Profitability ratios, trading on the equity. Digital Relay has both preferred and common stock outstanding. The com