Compute the following ratios and show the answer to two digits past the decimal: (i) the current ratio, (ii) the acid-test ratio. Use Excel formulas in the cells indicated below in yellow for calculating your ratios.

Part A – Chapter 21 in your textbook contains examples that will be helpful for completing the exercises below.
1. Using Excel formulas, prepare a vertical analysis for 2017 for the balance sheet below (only use 2017).
2. Using Excel formulas, prepare a horizontal analysis for the balance sheet below (use 2016 & 2017 – also note the order of the columns below).
3. Compute the following ratios and show the answer to two digits past the decimal: (i) the current ratio, (ii) the acid-test ratio. Use Excel formulas in the cells indicated below in yellow for calculating your ratios. Formulas for this exercise are located on page 779 in your textbook or on the Table 21-1 tab in this Excel file.
Current ratio:
Acid-test ratio:
4. Using Table 21-1, how would you interpret the current ratio result you computed above?
5. Using Table 21-1, how would you interpret the acid-test ratio result you computed above?
Green’s Landscaping
Balance Sheet
December 31, 2016 and 2017
2017	2016
Assets
Current Assets
Cash	$5,275	$4,507
Accounts receivable	7,305	5,118
Merchandise inventory	45,522	48,722
Total current assets	58,102	58,347
Plant and equipment
Equipment	20,173	25,942
Total assets	78,275	84,289
Liabilities
Current liabilities
Accounts payable	3,809	4,476
Wages payable	2,432	1,973
Total current liabilities	6,241	6,449
Long-term liabilities
Mortgage note payable	36,454	45,899
Total liabilities	42,695	52,348
Owner’s Equity
A. Green, capital	35,580	31,941
Total liabilities and owner’s equity	78,275	84,289

Part B – Chapter 21 in your textbook contains examples that will be helpful for completing the exercises below.
1. Using the information below, prepare a vertical analysis for the income statement for 2017.
2. Using the information below, prepare a horizontal analysis of the income statement from 2017.
3. In which areas, if any, has the company seen increases since 2016?
4. In which areas, if any, has the company seen decreases since 2016?
5. Compute the following ratio and show the answer to two digits past the decimal. Use an Excel formula in the cell indicated below in yellow for calculating your ratio.
Operating ratio:
6. Using table 21-1, how would you interpret this ratio?
Artie’s Painting
Income Statement
For the Years Ending December 31, 2016 and 2017
2017	2016
Net sales	$24,789	$23,642
Cost of goods sold	15,323	14,239
Gross profit	9,466	9,403
Operating expenses	3,873	3,702
Net income	5,593	5,701

Instructions