The following information is extracted from the accounts of Sweeney Sports Ltd - Leaving Cert Business - Question D - 2008

The Working Capital Ratio (WCR) formula is given by:

$\text{WCR} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$

For 2006:
Current Assets = €290,000
Current Liabilities = €145,000

$\text{WCR (2006)} = \frac{290,000}{145,000} = 2:1$

For 2007:
Current Assets = €300,000
Current Liabilities = €200,000

$\text{WCR (2007)} = \frac{300,000}{200,000} = 1.5:1$

Comment on the trend:
The trend indicates a decrease in the Working Capital Ratio from 2:1 in 2006 to 1.5:1 in 2007. This decline suggests that the company has a lesser buffer of current assets to cover its current liabilities, moving away from the ideal ratio of 2:1.