The comparative financial statements of Harbour View for 2014, 2013, and 2012 included the selected data shown below.

Required
1. Compute these ratios for 2014 and 2013:
a. Current ratio
b. Acid-test ratio
c. Days' sales in receivables
2. Write a memo explaining to Jack Dodds, owner of Harbour View, which ratio values showed improvement from 2013 to 2014, and which ratio values showed deterioration. Discuss whether these factors convey a favourable or an unfavourable impression about the company.

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2014 2013 2012 (In millions) Balance Sheet Current assets: $ 560 $ 520 Cash 580 Short-term investments 280 340 252 Receivables, net Inventories 560 520 488 720 680 600 Prepaid expenses 100 40 80 $ 2,140 $ 1,200 $ 2,240 $ 1,160 Total current assets $1,940 $1,320 Total current liabilities Income Statement Sales revenue $11,680 $10,220 $8,400