Problem 1: Compute for the profitability ratios of both Ellane and meLanie. Which of the two companies do you believe is more profitable? Problem 2: Compute for operational efficiency ratios of both Ellane and meLanie. Which of the two companies is more efficient? Problem 3: Compute for the financial health ratios of both ellane and meLanie. Which of the two companies is more financially healthy?
Problem 1: Compute for the profitability ratios of both Ellane and meLanie. Which of the two companies do you believe is more profitable? Problem 2: Compute for operational efficiency ratios of both Ellane and meLanie. Which of the two companies is more efficient? Problem 3: Compute for the financial health ratios of both ellane and meLanie. Which of the two companies is more financially healthy?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Problem 1:
Compute for the profitability ratios of both Ellane and meLanie. Which of the two companies do you believe is more
profitable?
Problem 2:
Compute for operational efficiency ratios of both Ellane and meLanie. Which of the two companies is more efficient?
Problem 3:
Compute for the financial health ratios of both ellane and meLanie. Which of the two companies is more
financially healthy?
Transcribed Image Text:Below are the comparative Statement of Comprehensive Income & Statement of Financial Position of
Ellane Company & Lanie Company:
Statement of Comprehensive Income
Ellane Company
2013
Melanie Company
2014
2013
2014
Net Sales
Cost of Goods Sold
3,407,921.00
2,377,078.00
665,005.00
745,883.60
530,200.00
173,800.00
Selling Expenses
General and administrative expenses
119,900.00
14,630.00
Interest Expense
Net Income
19.756.00
26.182.00
4.954.40
P22,299.20
Statement of Financial Position
Elane Company
Lanie Company
2014
2013
2014
2013
96,102.00
345,600.00
225,600.00
20,000.00
1.100.000.00
1.787.302.00
49,939.20
68,543.00
40,345.20
16,000.00
Current Assets
Accounts Receivable
Inventory
Prepaid Assets
Equipment, net
Total Assets
71,715.00
350,000.00
275,430.00
20,000.00
1.146.882.00
1.864.027.00
48,774.00
75,675.00
43,890.20
15,000.00
307.401.60 276.786.40
490,740.80 451,613.80
Current Liabilities
143,715.00
166,793.00
77,765.60
66,618.20
Long-Term Liabilities
Owner's Capital
65,164.00
347.811.20 329,995.60
238,700.00
198,000.00
55,000.00
1.481.612.00
1.422.509.00
Total Liabilities and Owner's Capital 1.864,027.00
1.787.302.00
490.740.80
451.613.80
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