Compute the debt-to-assets ratio, current ratio , and times interest earned ratio and identify the Company with the greater financial risk.

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Answer 1

Question

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

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Here are comparative balance sheets for Concord Company. CONCORD COMPANY Comparative Balance Sheets December 31 Assets 2022 2021 Cash $81,760 $24,640 Accounts receivable 97,440 85,120 Inventories 190,400 213,920 Land 80,640 112,000 Equipment 291,200 224,000 Accumulated depreciation (73,920) (35,840) Total $667,520 $623,840 Liabilities and Stockholders' Equity Accounts payable $41,440 $52,640 Bonds payable 168,000 235,200 Common stock ($1 par) 241,920 194,880 Retained earnings 216,160 141,120 Total $667,520 $623,840 Additional information: 1. Net income for 2022 was $112,000. 2. Cash dividends of $36,960 were declared and paid. 3. Bonds payable amounting to $67,200 were redeemed for cash $67,200. 4. Common stock was issued for $47,040 cash. 5. Equipment that cost $56,000 and had a book value of $33,600 was sold for $40,320 during 2022; land was sold at cost.

Answer 2

Question

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

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Answer 3

Question

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

Answer 6

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

Answer 7

Chapter 10, Problem 34BP

a.

To determine

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

Answer 8

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

Answer 9

b.

To determine

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - Prob. 6Q Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Prob. 9Q Ch. 10 - Prob. 10Q

Compute the debt-to-assets ratio, current ratio , and times interest earned ratio and identify the Company with the greater financial risk.

Compute the debt-to-assets ratio, current ratio, and times interest earned ratio and identify the Company with the greater financial risk.

Compute return-on-equity and return-on-assets ratio, identify the company that manages the assets effectively and identify the company that produces higher return from the stockholders’ perspective.

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