Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Concept explainers
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Question
based on the above financial statement,is the cash ratio of the company in 2020? (Answer in 2 decimal places)
![ABM22]
Current Assets
Cash
Accounts Receivable
Notes Receivable
Non-Current Assets
Land
ness
Merchandise Inventory
Prepaid Insurance
Office Supplies
Total Current Assets
TOTAL ASSETS
Current Liabilities
Building
Less: Accumulated Depreciation - Building
Vehicles
Accumulated Depreciation - Vehicles
Total Non-Current Assets
FUNCAR AUTO SALES
Statement of Financial Position
For the years ended June 30, 2019 and 2020
ASSETS
LIABILITIES AND EQUITY
Non-Current Liabilities
Account Payable
Interest Payable
Unearned Income
Total Current Liabilities
Notes Payable (Long-Term)
P
P
P
P
P
2019
167,850.00 P
87,780.00
69,900.00
77,250.00
16,500.00
9,990.00
429,270.00 P
1,250,000.00 P
750,000.00
265,000.00
668,000.00
104,000.00
2,299,000.00
2,728,270.00 P
399,050.00 P
1.270.00
362,550.00
762,870.00 P
1,100,000.00
2020
156,600.00
90,800.00
34,550.00
64,800.00
8,000.00
16,500.00
371,250.00
1,250,000.00
750,000.00
305,000.00
668,000.00
138,000.00
2,225,000.00
2,596,250.00
438,100.00
2,550.00
440,650.00
950,000.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f2b6d9c-9995-46fc-b7bd-b3d175cbc6f7%2F4c8d9f82-e24e-4df8-9a13-5eb081334736%2Fnpctr3n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ABM22]
Current Assets
Cash
Accounts Receivable
Notes Receivable
Non-Current Assets
Land
ness
Merchandise Inventory
Prepaid Insurance
Office Supplies
Total Current Assets
TOTAL ASSETS
Current Liabilities
Building
Less: Accumulated Depreciation - Building
Vehicles
Accumulated Depreciation - Vehicles
Total Non-Current Assets
FUNCAR AUTO SALES
Statement of Financial Position
For the years ended June 30, 2019 and 2020
ASSETS
LIABILITIES AND EQUITY
Non-Current Liabilities
Account Payable
Interest Payable
Unearned Income
Total Current Liabilities
Notes Payable (Long-Term)
P
P
P
P
P
2019
167,850.00 P
87,780.00
69,900.00
77,250.00
16,500.00
9,990.00
429,270.00 P
1,250,000.00 P
750,000.00
265,000.00
668,000.00
104,000.00
2,299,000.00
2,728,270.00 P
399,050.00 P
1.270.00
362,550.00
762,870.00 P
1,100,000.00
2020
156,600.00
90,800.00
34,550.00
64,800.00
8,000.00
16,500.00
371,250.00
1,250,000.00
750,000.00
305,000.00
668,000.00
138,000.00
2,225,000.00
2,596,250.00
438,100.00
2,550.00
440,650.00
950,000.00
![BM22] Business Finance (Term 1, 1st Semester, SY 2023-2024)
non content ASSELS
Land
Building
Less: Accumulated Depreciation - Building
Vehicles.
Accumulated Depreciation - Vehicles
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
LIABILITIES AND EQUITY
Account Payable
Interest Payable
Unearned Income
Total Current Liabilities
Non-Current Liabilities
Notes Payable (Long-Term)
Total Liabilities
Finn, Capital, June 30
TOTAL LIABILITIES AND EQUITY
Based on the above financial statement,
P 1,250,000.00
750,000.00
P
P
P
265,000.00
668,000.00
104,000.00
2,299,000.00
P
2,728,270.00 P
399,050.00 P
1,270.00
362,550.00
762,870.00
1,100,000.00
1,250,000.00
750,000.00
305,000.00
668,000.00
138,000.00
2.225,000.00
865,400.00
2,596,250.00
438,100.00
2,550.00
440,650.00
P 1,862,870,00 P 1,390,650.00
950,000.00
1,205,600.00
2,728,270.00 P 2,596,250.00
is the cash ratio of the company in 2020. (Answer in 2 decimal places)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f2b6d9c-9995-46fc-b7bd-b3d175cbc6f7%2F4c8d9f82-e24e-4df8-9a13-5eb081334736%2Fpdf61yv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:BM22] Business Finance (Term 1, 1st Semester, SY 2023-2024)
non content ASSELS
Land
Building
Less: Accumulated Depreciation - Building
Vehicles.
Accumulated Depreciation - Vehicles
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
LIABILITIES AND EQUITY
Account Payable
Interest Payable
Unearned Income
Total Current Liabilities
Non-Current Liabilities
Notes Payable (Long-Term)
Total Liabilities
Finn, Capital, June 30
TOTAL LIABILITIES AND EQUITY
Based on the above financial statement,
P 1,250,000.00
750,000.00
P
P
P
265,000.00
668,000.00
104,000.00
2,299,000.00
P
2,728,270.00 P
399,050.00 P
1,270.00
362,550.00
762,870.00
1,100,000.00
1,250,000.00
750,000.00
305,000.00
668,000.00
138,000.00
2.225,000.00
865,400.00
2,596,250.00
438,100.00
2,550.00
440,650.00
P 1,862,870,00 P 1,390,650.00
950,000.00
1,205,600.00
2,728,270.00 P 2,596,250.00
is the cash ratio of the company in 2020. (Answer in 2 decimal places)
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