Q1. Hill Roy Corporation. has asked the accounts department to determine whether the companys ability to pay its current liabilities and long-term debts improved or deteriorated during current year. To answer this question, compute the following ratios for current year and preceding year.

a. Current ratio b. Quick (acid-test) ratio c. Debt ratio d. Times-interest-earned ratio e. Prepare a small report based on your analysis of the following financial statement data in a written report format.

All is given

Current Year Preceding Year Balance Sheet: Cash... Short-term investments Net receivables Inventory Prepaid expenses. Total current assets Total current liabilities Income Statement: Net credit sales Cost of goods sold $ 17,000 11,000 64,000 77.000 16,000 $185.000 $111.000 $ 22,000 26,000 73,000 71.000 8,000 $200,000 $ 91,000 $654,000 327,000