The current ratio is equal to a firm's current assets divided by its current liabilities. Use the information in Figure 8A.2 on page 281 to calculate Twitter's current ratio on December 31, 2014. Investors generally prefer that a firm's current ratio be greater than 1.5. What problems might a firm encounter if the value of its current assets is low relative to the value of its current liabilities?

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Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Total liabilities Stockholders' equity Total liabilities and stockholders' Assets Current assets $ 394 1,563 1,957 3,626 $5,583 $4,256 557 623 147 $5,583 Property and equipment Goodwill Other assets Total assets equity