Ltd has the following information at 31 December

20X8:

		000			000
	Profit for the year	12,500		Trade payables	3,700
	Prepaid rent	2,000		Trade receivables	6,000
	Salary accrual	2,000		Cash	3,000
	Profit before interest and tax	32,200		Interest payable for the year	3,418
	Inventories	900		Equipment (after depreciation)	12,000

Compute

Telford Telecom

Ltd's current ratio and interest cover ratios.

Question content area bottom

Part 1

The current ratio equation is: (Complete the necessary drop downs.)

Current ratio

=

Part 2

The current ratio for

Telford Telecom

Limited is:

(Round to two decimal places as needed. If the answer is less than 1, place a "0" in front of the decimal point.)

Current ratio

=

=

enter your response here:1

Part 3

The interest cover ratio equation is: (Complete the necessary drop downs.)

Interest cover ratio

=

Part 4

The interest cover ratio for

Telford Telecom

Limited is:

(Round to two decimal places.)

Interest cover ratio

=

=

enter your response here times

Part 5

If you are informed that last year's interest cover was 4.5 times, answer the following:

A.

The interest cover has deteriorated in the year

B.

The interest cover has remained unchanged in the year

C.

The interest cover has improved in the year