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Wildhorse Corporation was formed five years ago through an initial public offering (IPO) of common shares. Daniel Brown, who owns 15% of the common shares, was one of the organizers of Wildhorse and is its current president. The company has been successful, but it is currently experiencing a shortage of funds. On June 10, 2020, Daniel Brown approached the Hibernia Bank, asking for a 24-month extension on two $35,500 notes, which are due on June 30, 2020, and September 30, 2020. Another note for $6,300 is due on March 31, 2021, but he expects no difficulty in paying this note on its due date. Brown explained that Wildhorses cash flow problems are due primarily to the companys desire to finance a $295,000 plant expansion spent evenly over the next two fiscal years through internally generated funds. The plant expansion will be used in operations following the completion of the construction in 2023. The commercial loan officer of Hibernia Bank requested financial reports for the past two fiscal years. These reports are reproduced below.

WILDHORSE CORPORATION Statement of Financial Position March 31
Assets		2020			2019
Cash		$18,500			$12,500
Notes receivable		147,100			134,000
Accounts receivable (net)		131,700			124,500
Inventories (at cost)		106,600			50,000
Plant and equipment (net of depreciation)		1,439,000			1,420,000
Total assets		$1,842,900			$1,741,000
Equity and Liabilities
Share capitalcommon (135,000 shares issued)		$1,350,000			$1,350,000
Retained earnings (note 1)		386,700			272,000
Accrued liabilities		9,100			5,900
Notes payable (current)		77,300			61,400
Accounts payable		19,800			51,700
Total equity and liabilities		$1,842,900			$1,741,000

Note 1: Cash dividends were paid at the rate of $1 per share in fiscal year 2019 and $2 per share in fiscal year 2020.

WILDHORSE CORPORATION Income Statement For the Fiscal Years Ended March 31
		2020			2019
Sales		$2,997,000			$2,695,000
Cost of goods sold (note 2)		1,528,000			1,425,000
Gross margin		$1,469,000			$1,270,000
Operating expenses		845,000			775,000
Income before income tax		$624,000			$495,000
Income tax (30%)		187,200			148,500
Net income		$436,800			$346,500

Note 2: Depreciation charges on the plant and equipment of $100,000 and $102,500 for fiscal years ended March 31, 2019 and 2020, respectively, are included in cost of goods sold. Additional information:

		2020		2019
1. Cash flows from operating activities		$459,000		$350,000
2. Capital expenditures for the year		128,000		110,000

Compute the following items for Wildhorse Corporation.

(a1)

Compute current ratio for fiscal years 2019 and 2020. (Round answers to 2 decimal places, e.g. 5.75:1.)

		2019			2020
Current ratio			to 1			to 1

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