The following financial data were taken from the annual financial statements of Smith corporation:

The following financial data were taken from the annual financial statements of Smith corporation: 2007 2008 2009 Current assets $450,000 $400,000 $500,000 Current liabilities $390,000 $300,000 $340,000 Sales $1,450,000 $1,500,000 $1,400,000 Cost of goods sold $1,180,000 $1,020,000 $1,120,000 Inventory $280,000 $200,000 $250,000 Accounts receivable $120,000 $110,000 $105,000 a. Based on the data, calculate the following for 2008 and 2009: 1. Working capital 2. Current ratio 3. Acid-test ratio 4. Accounts receivable turnover 5. Merchandise inventory turnover 6. Inventory turnover in days b. Evaluate the results of your computations in regard to the short-term liquidity of the firm.

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