The balance sheet for Chico Electronics represented bellow:

Chico Electronics

Balance sheet

As of December 31

20112012

Cash .........................................................10,00013,000

Accounts receivable ..............................30,00040,000

Inventory...............................................160,000200,000

Prepaid expenses ...................................12,00015,000

Total current assets .................................212,000268,000

Long -term investments .........................40,000040,000

Buildings .....................................................60,00050,000

Equipments ................ 100,00090,000

Total assets412,000448,000

Accounts payable ....................................8,0007,000

Notes payable...........................................12,00015,000

Insurance payable .......................................5,00010,000

Total current liabilities ...............................25,00032,000

Long - term debt .........................................87,000116,000

Total liabilities............................................112,000148,000

Common stock ..........................................300,000300,000

Total Liabilities and Equity412,000448,000

Required:

Evaluate the liquidity of Chico Electronics by Computing and interpreting the following ratios of the company for year 2012, and compare the results with year 2011: (Show all rules and calculations you need to compute)

A. current ratio

B. acid-test ratio

C. net working capital