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Return on assets d. Current ratio e. Receivables turnover

Return on assets d. Current ratio e. Receivables turnover

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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c. Return on assets
d. Current ratio
e. Receivables turnover

Please answer questions C,D and E and please provide an explanation of the result, this part is crucial to the question

Q5. Analysis of Financial Statements There was a bit of concem 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 Liabilities Current Assets: Current Liabilities: Cash 500,000 Accounts Payable 300,000 Notes Payable 700,000 Accounts Receivable 500,000 Inventory 800,000 Total Current Assets 1,300,000 Total Current Liabilities 1,200,000 Owners' Equity 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Owners' Equity Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation 600,000 100,000 Net Fixed Assets 100,000 Total Assets 800,000 Total Liabilities and Owners Equity 2,900,000 Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales 3,400,000 Less: Cost of Goods Sold 2,700,000 Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense 700,000 682.000 (682,000) 120.000 (802,000) (280,000) (522,000) Taxable Income Less: Taxes Net Income Dividends Addition to Retained Earmings (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define cach ratio, perform the calculation, and provide an explanation of the result.
Transcribed Image Text:Q5. Analysis of Financial Statements There was a bit of concem 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 Liabilities Current Assets: Current Liabilities: Cash 500,000 Accounts Payable 300,000 Notes Payable 700,000 Accounts Receivable 500,000 Inventory 800,000 Total Current Assets 1,300,000 Total Current Liabilities 1,200,000 Owners' Equity 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Owners' Equity Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation 600,000 100,000 Net Fixed Assets 100,000 Total Assets 800,000 Total Liabilities and Owners Equity 2,900,000 Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales 3,400,000 Less: Cost of Goods Sold 2,700,000 Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense 700,000 682.000 (682,000) 120.000 (802,000) (280,000) (522,000) Taxable Income Less: Taxes Net Income Dividends Addition to Retained Earmings (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define cach ratio, perform the calculation, and provide an explanation of the result.
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