
Cash Ratio: It is useful to evaluate the cash available as cash is an important factor for day to day operations for any business. It comes under liquidity ratios and cash is divided by current liabilities compute this ratio.
Times-interest-earned Ratio: It reflects company’s earnings as the times of its interest expenses. It is used to evaluate the ability to pay interest expense, a company has. Higher ratio is preferred as it enables to pay the obligation of interest.
Inventory Turnover: It is a part of efficiency ratios used during the process of ratio analysis. It reflects the number of times a company’s inventory is converted into sale during a particular period. The cost of goods sold is divided by average inventory to get the value of inventory turnover.
Gross Profit Percentage: This ratio evaluates the profitability of each dollar of sale. Gross profit is first step toward the profitability so companies are very keen to have a higher gross profit percentage. It enables them to cover the operating expenses related to business.
Debt to Equity Ratio: This ratio reflects the relationship of company’s total liabilities to total equity. It is used to represent financial leverage in the business. Higher ratio means that the company has used debts more than the owner’s capital to acquire the assets.
Earnings per Share of Common Stock: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.
Price/Earnings Ratio: It depicts the relation of market price of a share to earnings per share of that company. The price/earnings ratio presents the market value of the amount invested to earn $1 by a company. It is major tool to be used by investors before the decisions related to investments in a company.
1.
a.
To Compute: The current ratio of G Company for 2017 and 2018.
b.
To Compute: The cash ratio of G Company for 2017 and 2018.
c.
To Compute: The times-interest-earned ratio of G Company for 2017 and 2018.
d.
To Compute: The inventory turnover of G Company for 2017 and 2018.
e.
To Compute: Gross profit percentage of G Company for 2017 and 2018.
f.
To Compute: The debt to equity ratio of company G for 2017 and 2018.
g.
To Compute: The rate of return on common stockholders’ equity of company G for 2017 and 2018.
h.
To Compute: The earnings per share of common stock of company G for 2017 and 2018.
i.
To Compute: The price/earnings ratio of company G for 2017 and 2018.
2.
a.
To Analyze: The change in company G’ ability to pay debts and to sell inventory during 2018.
b.
To Analyze: The change in investment attractiveness of company G’s common stock during 2018.

Want to see the full answer?
Check out a sample textbook solution
Chapter 17 Solutions
ACCOUNTING PRINCIPLES V1 6/17 >C<
- Summary: You will investigate a case of asset theft involving several fraudsters for this assignment. The case offers a chance to assess an organization's corporate governance, fraud prevention, and risk factors. Get ready: Moha Computer Services Limited Links to an external website: Finish the media activity. The scenario you need to finish the assignment is provided by this media activity. Directions: Make a four to five-page paper that covers the following topics. Management must be questioned by an auditor regarding the efficacy of internal controls and the potential for fraud. A number of warning signs point to the potential for fraud in this instance. List at least three red flags (risk factors for fraud) that apply to the Moha case. Sort them into three groups: opportunities, pressures/incentives, and (ethical) attitudes/justifications. Determine which people and organizations were impacted by Moha Computer Services Limited's enormous scam. Describe the fraud's financial and…arrow_forwardCoarrow_forwardCritically assess the role of the Conceptual Framework in financial reporting and its influence onaccounting theory and practice. Discuss how the qualitative characteristics outlined in theConceptual Framework enhance financial reporting and contribute to decision-usefulness. Provideexamples to support your analysis.arrow_forward
- Critically analyse the role of financial reporting in investment decision-making,emphasizing the qualitative characteristics that enhance the usefulness of financialstatements. Discuss how financial reporting influences both investor confidence andregulatory decisions, using relevant examples.arrow_forwardHelp need!!arrow_forwardAnswer please correarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





