Liquidity ratios: O measure the amount of debt the firm uses. O measure how effectively a firm is managing its assets. show the relationship of a firms cash and other current assets to its current liabilities. show the combined effects of all areas of the firm on operating results. Balance Sheet Current aggets Cash 870,000 Acc receivable not given Inventories 1,340,000 Fixed assets 4,190,000 TOTAL ASSETS 7,900,000 Current liabilities Acc payable not given Long-term debt 4,000,000 Common stock 950,000 Retained earnings 2,390,000 TOTAL LIAB and EQUITY 7,900,000 Income Statement Sales 31,600,000 Operating expense 24,650,000 EBIT 6,950,000 Interest expense 520,000 EBT 6, 430,000 Taxes 2,572,000 Het income 3,858,000 What is the firm's debt ratio? Interest expense 520,000 EBT 6, 430,000 Taxes 2,572,000 Net income 3,858,000 What is the firm's debt ratio? 42.28% 50.63% 57.72% 92.91% 87.97%