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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