C928 Financial Management for IT Professionals Task 1: Analyzing Financial
Ratios for Sparkit's IT Department PASSED 2025-2026 Western Governors
University
C928 Task 1
Type Your Name Here
Western Governors University
Course number: Name
Instructor
, Task 1 Reading and Understanding Financial Statements
Current Ratio Measure of Liquidity for Sparkit
Summary
For Fiscal Year 2, Sparkit's current ratio was 1.401. This ratio indicates a stable liquidity position and shows
that for $1 of current liabilities, Sparkit has $1.401 in current assets.
Discuss why it is important for Sparkit’s IT manager to understand the current ratio measure of
liquidity.
The current ratio measure of liquidity is an important metric that helps a company to analyses what percent
of current liability is funded by current liabilities. The IT department has multiple projects going on at same
time. These projects require purchasing software, hardware. Understanding of the current ratio will help the IT
manager to understand the overall financial health and he can allocate the resources in better way (Das,
2023).
Discuss how the current ratio influences Sparkit’s IT department’s productivity.
1. Prioritizing important expenses/ IT Projects: If the company had negative/ low current ratio, it would
face liquidity issues. In this case the IT manager can prioritize essential expenses over other expenses.
Less urgent projects can be deferred. This will increase IT department’s productivity.
2. Vendor Negotiations: A good current ratio helps IT department to understand that there is leverage
for negotiating better with vendors. A lower ratio will require the manager to negotiate better or find
vendors who offer flexible terms. This will increase IT department’s productivity (Bowlin, 2018).
Provide the Curren Ratio for Fiscal Year 2 from Figures A1.1 (Income Statement) and
A1.2(Balance Sheet), including how you calculated your answer.
For Fiscal Year 2:
Current Assets: $51,448.91
Current Liabilities: $36,728.71
Current Ratio for Fiscal Year 2 = $51448.91/$36728.71 = 1.401
Fiscal Year 1: $47,916/$34,152 = 1.403
This ratio is very close to Fiscal Year 1's ratio, indicating stable liquidity.
The current ratio of 1.401 means that Sparkit has $1.401 of current assets for $1 of current liabilities. Sparkit
has good liquidity position. The company has short-term assets to cover its obligations. Sparkit can afford to
handle unexpected expenses, or they can take first mover advantage in new opportunities. This stability shows
Ratios for Sparkit's IT Department PASSED 2025-2026 Western Governors
University
C928 Task 1
Type Your Name Here
Western Governors University
Course number: Name
Instructor
, Task 1 Reading and Understanding Financial Statements
Current Ratio Measure of Liquidity for Sparkit
Summary
For Fiscal Year 2, Sparkit's current ratio was 1.401. This ratio indicates a stable liquidity position and shows
that for $1 of current liabilities, Sparkit has $1.401 in current assets.
Discuss why it is important for Sparkit’s IT manager to understand the current ratio measure of
liquidity.
The current ratio measure of liquidity is an important metric that helps a company to analyses what percent
of current liability is funded by current liabilities. The IT department has multiple projects going on at same
time. These projects require purchasing software, hardware. Understanding of the current ratio will help the IT
manager to understand the overall financial health and he can allocate the resources in better way (Das,
2023).
Discuss how the current ratio influences Sparkit’s IT department’s productivity.
1. Prioritizing important expenses/ IT Projects: If the company had negative/ low current ratio, it would
face liquidity issues. In this case the IT manager can prioritize essential expenses over other expenses.
Less urgent projects can be deferred. This will increase IT department’s productivity.
2. Vendor Negotiations: A good current ratio helps IT department to understand that there is leverage
for negotiating better with vendors. A lower ratio will require the manager to negotiate better or find
vendors who offer flexible terms. This will increase IT department’s productivity (Bowlin, 2018).
Provide the Curren Ratio for Fiscal Year 2 from Figures A1.1 (Income Statement) and
A1.2(Balance Sheet), including how you calculated your answer.
For Fiscal Year 2:
Current Assets: $51,448.91
Current Liabilities: $36,728.71
Current Ratio for Fiscal Year 2 = $51448.91/$36728.71 = 1.401
Fiscal Year 1: $47,916/$34,152 = 1.403
This ratio is very close to Fiscal Year 1's ratio, indicating stable liquidity.
The current ratio of 1.401 means that Sparkit has $1.401 of current assets for $1 of current liabilities. Sparkit
has good liquidity position. The company has short-term assets to cover its obligations. Sparkit can afford to
handle unexpected expenses, or they can take first mover advantage in new opportunities. This stability shows
