The comparative financial statements of Bien Taco Restaurants for 2006, 2005 and 2004 include the following selected data:
*Please see attachment
1. Compute these ratios for 2006 and 2005:
a. Quick ratio
b. Day's sales in receivable
2. Write a memo explaining to the company owner which ratios improved from 2005 to 2006, which ratios deteriorated, and which item in the financial statements changed and caused changes in some ratios? Discuss whether this change conveys a favorable or an unfavorable impression about the company.
Your tutorial is attached in excel and indicates how these ratios changed and whether this is a favorable development.