Ratio analysis is a very important part, for example, of credit-making decisions which banks or lenders use in deciding whether to grant loans to third parties or not.

Current Assets	$200,000	$200,000
Current Liabilities	$25,000 ($5,000+$20,000)	$292,000 ($287,000+$5,000)
Long term liabilities	$267,000 (287,000-$20,000	$0
Debt Ratio	8 ($200,000/$25,000)	0.68 ($200,000/$292,000)

above Correct way Raffies bookkeepers way

What affect does classifying the entire amount of the mortgage as a current liability have on the calculation, for example, of the current ratio or working capital for Raffie's Kids?