
Requirement 1
Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.
Formula:
The ideal current ratio is 2:1
Debt ratio: Debt ratio is determined as total liabilities by total assets. It is used by the company to determine the debt amount that is used to finance assets of the company. When the ratio is higher than 50%, then the risk is higher.
Formula:
Earnings per share: Earnings per share help to measure the profitability of a company. Earnings per share are the amount of profit that is allocated to each share of outstanding stock.
Formula:
Compute of Company MT’s current ratio, debt ratio and earnings per share.
To compute: Current ratio, debt ratio and earnings per share
Requirement 2
To compute: Current ratio, debt ratio, and earnings per share after evaluation of the following transactions:

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Chapter 15 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters, Student Value Edition (6th Edition)
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