Use Southgate Inc.'s financial statements to compute the current ratio, and indicate whether the change from year to year is favourable or unfavourable. For your analysis, assume that all other things have remained constant. Apply your analysis in very general terms. All values should be accurate to at least two decimal places.

Please brief with the explanation

Sales Income Statement For Years Ended December 31, 2014, 2013, and 2012 2014 2013 2012 $1,042,600 $1,070,800 $1,166,800 Cost of goods sold 430,600 490,400 519,900 Gross profit from sales 612,000 580,400 646,900 Operating expenses 201,200 243,400 232,400 Income from operations 410,800 337,000 414,500 Interest expense 9,300 8,400 9,100 Income before taxes 401,500 328,600 405,400 Income taxes 51,200 42,500 97,400 Net income $350,300 $286,100 $308,000 Southgate Inc. Balance Sheet December 31, 2014, 2013, and 2012 Assets 2014 2013 2012 Cash $49,000 $50,200 $59,500 Short-term investments 16,000 19,000 20,000 Accounts receivable, net 24,300 22,000 22,600 Merchandise inventory 20,500 24,300 25,000 Prepaid expenses 12,800 11,000 9,600 Notes receivable, due in 2017 6,500 8,000 8,500 Plant assets, net 359,000 328,000 283,000 Total assets $488,100 $462,500 $428,200 Liabilities and Equity Accounts payable $11,600 $11,100 $10,300 Salaries payable 2.300 2.200 2,800 Income taxes payable 72,650 63,100 67,450 Long-term note payable secured by mortgage on plant assets 68,000 83,000 92,000 Share capital, 150,000 shares 140,000 140,000 170,000 Retained earnings 193,550 163,100 85,650 Total liabilities and equity, $488,100 $462,500 $428,200 Ratio 2014 2013 Analysis (select one) Current ratio