Chapter 13, Problem 2PSA

To determine

(1)

Introduction:

Liquidity or short-term ratios determines the ability of a firm to pay its current obligations. A good liquidity ration states that the company has liquid assets which can be easily convertible into cash. It includes current ratio, quick ratio etc.

To calculate:

Current ratio.

To determine

(2)

Introduction:

Common size income statements help to express each financial statement line item as a percentage of the base year.

To express:

Income-statement in form of common-size percent’s.

To determine

(3)

Introduction:

Trend analysis helps in calculating trend percent for data across the period that show patters.

To calculate:

Balance sheets trend percent’s.

To determine

(4)

Introduction:

Liquidity or short-term ratios determines the ability of a firm to pay its current obligations. A good liquidity ration states that the company has liquid assets which can be easily convertible into cash. It includes current ratio, quick ratio etc.

To comment:

On the significant relations revealed by the ratios and percent computed.