Chapter 18, Problem 18.4BYP

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

Acid-test Ratio: It is a ratio used to determine a company’s ability to pay back its current liabilities by liquid assets that are current assets except inventory and prepaid expenses.

Asset Turnover: It is the extended form of rate of return on total assets. Rate of return on total assets measures the profit generated but asset turnover measures the sales generated whereas from the use of total assets.

Earnings per Share: 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.

To analyze: The given ratios and financial data of G Company for 2016 and 2017.