Suppose the balance sheets of a corporation for two years reported these figures:

The notes to the 2017 financial statements report that because of some refinancing arrangements, the corporation was able to reclassify $7.0 billion from current liabilities to long-term liabilities during 2017.
Required
1. Compute the corporation's current ratio (current assets ÷ current liabilities) at the end of each year. Describe the change between the years that you observe.
2. Suppose that the corporation had not refinanced and not been able to reclassify the $7.0 billion of current liabilities as long term during 2017. Recompute the current ratio for 2017 to include the $7.0 billion. Why do you think the corporation decided to reclassify the liabilities as long term?

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Billions 2017 $24.50 44.74 $69.24 11.66 29.92 27.66 2016 $22.92 40.96 $63.88 $15.12 23.32 25.44 $63.88 Total current assets Property, plant, and equipment, net Total assets Total current liabilities Long-term liabilities Shareholders' equity Total liabilities and shareholders' equity 69.24