Problem: The comparative financial statements for Prince Company are below:
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Year 2
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Year 1
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Income statement:
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Sales revenue
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$191,900
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$168,400
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Cost of goods sold
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113,800
|
100,400
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Gross profit
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78,100
|
68,000
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Operating expenses and interest expense
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57,400
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54,400
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Pretax income
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20,700
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13,600
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Income tax
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6,210
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4,080
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Net income
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$14,490
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$9,520
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Balance sheet:
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Cash
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$5,300
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$5,400
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Accounts receivable (net)
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14,600
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16,100
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Inventory
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40,300
|
33,300
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Property and equipment (net)
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45,800
|
37,400
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Total assets
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$106,000
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$92,200
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Current liabilities (no interest)
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$14,700
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$15,700
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Long-term liabilities (10 interest)
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44,000
|
44,000
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Common stock ($5 par value, 5,900 shares outstanding)
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29,500
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29,500
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Retained earnings
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17,800
|
3,000
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Total liabilities and stockholders' equity
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$106,000
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$92,200
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Required: By what amount did the current ratio change from Year 1 to Year 2?
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