The comparative financial statements of Sunset Pools, Inc., for 2009, 2008, and 2007 included the following selected data.

Required
1. Compute these ratios for 2009 and 2008:
a. Current ratio
b. Acid-test ratio
c. Days' sales in receivables
2. Write a memo explaining to top management which ratio values improved from 2008 to 2009 and which ratio values deteriorated. State whether the overall trend is favorable or unfavorable and give the reason for your evaluation.

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2009 2008 2007 (In millions) Balance sheet: Current assets: Cash. $ 86 $ 80 154 60 122 140 Receivables, net of allowance for doubtful accounts of $27 $21, and $15, respectively247245 381 887 498 278 342 A6 848 Inventoness. 319 Prepaid expenses Total current assets..813 21 2 Toral current liabiliti 403 413 Income statement: Net sales $2,898 $2,727 $2,206