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a. Return on equity b. Total assets turnover c. Return on assets

a. Return on equity b. Total assets turnover c. Return on assets

FINANCIAL ACCOUNTING
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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a. Return on equity
b. Total assets turnover
c. Return on assets
d. Current ratio
e. Receivables turnover

There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Assets Current Assets: Cash Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: 500,000 Accounts Payable 300,000 Notes Payable 800,000 1,300,000 Total Current Liabilities Owners' Equity: 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Owners' Equity Liabilities Total Liabilities and Owners' Equity Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income Dividends Addition to Retained Earnings 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) 0 (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result. 700,000 500,000 1,200,000 600,000 100,000 100,000 800,000 2,900,000
Transcribed Image Text:There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Assets Current Assets: Cash Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: 500,000 Accounts Payable 300,000 Notes Payable 800,000 1,300,000 Total Current Liabilities Owners' Equity: 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Owners' Equity Liabilities Total Liabilities and Owners' Equity Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income Dividends Addition to Retained Earnings 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) 0 (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result. 700,000 500,000 1,200,000 600,000 100,000 100,000 800,000 2,900,000
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Receivables turnover of 11.33 means. Provide explanation please.

 

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Can you answer d and e

 

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