Selected financial data (in thousands) of two competitors, NEW Ltd and OLD Ltd, for 2021 are presented here.Net salesCost of salesBorrowing costs (interest expense)Income tax expenseProfitCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal equityTotal liabilities and equityTotal assets(a) Working capital.(b) Current ratio.(c)NEW LtdDebt to total assets ratio.$420 000227 50036 75049 00056 000$115 500444 500$560 000$ 52 500245 000262 500$560 000RequiredFor each entity, calculate these values and ratios:$490 000Selected statement of profit or loss data for yearCondensed statement of financial position (end of year)Beginning-of-year balances(d) Return on assets.(e) Profit margin.(f)Compare the liquidity, solvency and profitability of the two entities.OLD Ltd$350 000178 500105 00014 00017 500$ 70 000612 500$682 500$ 35 000560 00087 500$682 500$542 500

Ratio analysis is considered as the key aspect to measure the performance of the company. It is the…

Selected financial data (in thousands) of two competitors, NEW Ltd and OLD Ltd, for 2021 are presented here. NEW Ltd Net sales Cost of sales Borrowing costs (interest expense) Income tax expense Profit Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total equity Total liabilities and equity Total assets (a) Working capital. (b) Current ratio. $420 000 227 500 36 750 49 000 56 000 Debt to total assets ratio. $115 500 444 500 $560 000 $ 52 500 245 000 262 500 $560 000 Required For each entity, calculate these values and ratios: $490 000 Selected statement of profit or loss data for year Condensed statement of financial position (end of year) Beginning-of-year balances (c) (d) Return on assets. (e) Profit margin. (f) Compare the liquidity, solvency and profitability of the two entities. OLD Ltd $350 000 178 500 105 000 14 000 17 500 $ 70 000 612 500 $682 500 $ 35 000 560 000 87 500 $682 500 $542 500

Selected financial data (in thousands) of two competitors, NEW Ltd and OLD Ltd, for 2021 are presented here. NEW Ltd Net sales Cost of sales Borrowing costs (interest expense) Income tax expense Profit Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total equity Total liabilities and equity Total assets (a) Working capital. (b) Current ratio. $420 000 227 500 36 750 49 000 56 000 Debt to total assets ratio. $115 500 444 500 $560 000 $ 52 500 245 000 262 500 $560 000 Required For each entity, calculate these values and ratios: $490 000 Selected statement of profit or loss data for year Condensed statement of financial position (end of year) Beginning-of-year balances (c) (d) Return on assets. (e) Profit margin. (f) Compare the liquidity, solvency and profitability of the two entities. OLD Ltd $350 000 178 500 105 000 14 000 17 500 $ 70 000 612 500 $682 500 $ 35 000 560 000 87 500 $682 500 $542 500

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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