Revise your worksheet to reflect these updated assumptions and then answer the questions that follow.

	Current	Previous
Cash	$86,000	$76,000
Accounts receivable	56,000	61,000
Inventory	116,000	96,000
Long-term assets	284,200	171,000
Total assets	$542,200	$404,000

	Current	Previous
Current liabilities	$96,000	$86,000
Long-term liabilities	152,000	142,000
Total liabilities	248,000	228,000
Stockholders equity	294,200	176,000
Total liabilities and stockholders equity	$542,200	$404,000

	Current
Net sales	$480,000
Cost of goods sold	245,000
Operating expenses	76,000
Interest expense	13,600
Income tax expense	27,200
Net income	$118,200

Please answer the questions below in the screenprint:

2. All of the following are true, except: Risk ratios measure the liquidity and solvency of a business. Liquidity ratios measure the company's ability to pay current obligations using current assets. Solvency ratios measure the company's ability to pay its liabilities, both current and long term. The accounts used to calculate liquidity ratios are included in both current and long term assets and liabilities