1-9. (Ratio analysis) The financial statements and industry norms are shown belowfor the Congo Mining Company:a. Compute the financial ratios for Congo to compare both for 2017 and 2018against the industry norms.b. How liquid is the firm?c. Are its managers generating an adequate operating profit on the firm'sassets?d. How is the firm financing its assets?e. Are its managers generating a good return on equity?INDUSTRY NORMCurrent ratio5.10Acid-test (quick) ratio3.20Inventory turnover240Average collection period88.00Debt ratio0.35Times interest earned7.15Total asset turnover0.78Fixed-asset turnover1.10Operating profit margin23%Return on common equity11%The Congo Mining Company Balance Sheet at 12/31/2017 and 12/31/2018Assets20172018Cash$ 220$ 170430415Accounts receivableInventory570655$1,220$1,240Current assets$2,300$2,700Plant and equipment(1.300)$1,400(1.000)Less accumulated depreciationNet plant and equipment$1,300$2.520$2.640Total assetsLiabilities and Owners' EquityAccounts payableNotes payable-current (9%)Current liabilities$ 220$ 170170$ 340700220700Bonds (8.65% interest)Total debt$1,040$ 920$ 350$ 350Owners' equity Common stock600600Paid-in capital650$1.600650$1.600Retained earningsTotal owners' equity$2.640$2.520Total liabilities and owners' equity

The ratio's are done on the basis of data provided but for calculating other ratio's like asset…

19. (Ratio analysis) The financial statements and industry norms are shown below for the Congo Mining Company: Compute the financial ratios for Congo to compare both for 2017 and 2018 against the industry norms. a.

19. (Ratio analysis) The financial statements and industry norms are shown below for the Congo Mining Company: Compute the financial ratios for Congo to compare both for 2017 and 2018 against the industry norms. a.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cash Balance Sheet Marketable securities Account receivable Inventory Prepaid rent Total current assets Net Plant and equipment Total assets Account payable Notes payable Accruals Total current liabilities Long-term debt Common stockholders' equity Total liabilities and stockholders' equity Sales Less; Cost of goods sold Gross profit Less: General and administrative Less: Interest Less: Depreciation Total operating and interest expense Earning before tax Less: tax Net income Less: cash dividend Change in retained earnings James Company 2015 15,000 6,000 42,000 51,000 1,200 115,200 286,000 401,200 48,000 15,000 6,000 69,000 160,000 172,200 401,200 2016 14,000 6,200 33,000 84,000 1,100 138,000 270,000 408,300 57,000 13,000 5,000 75,000 150,000 183,300 408,300 600.00 460.000 140.000 30.000 10.000 30.000 70.000 70.000 27.100 42.900 31.800 11.100
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