A recent balance sheet of Oregon Foods is provided below: Other information provided by the company is
Question:
A recent balance sheet of Oregon Foods is provided below:
Other information provided by the company is as follows:
Compute and discuss briefly the significance of the following measures as they relate to Oregon
Foods:
a. Net income percentage in 2011.
b. Return on equity in 2011.
c. Working capital on December 31, 2011.
d. Current ratio on December 31, 2011.
OREGON FOODS BALANCE SHEET DECEMBER 31, 2011 Assets Cash Accounts receivable Office supplies Prepaid rent Equipment Accumulated depreciation: equipment(4,800) S 7.200 Total assets . . . 6,800 7,200 300 1,700 $12,000 $23,200 Liabilities Accounts payable Income taxes payable Total liabilities. $ 2,200 1,800 4,000 Stockholders' Equity Capital stock .. . Retained earnings.. Total stockholders' equity Total liabilities and stockholders' equity $10,000 9,200 $19,200 $23,200 Total revenue for the year ended December 31, 2011 Total expenses tor the year ended December 31,2011 Total stockholders' equity, January 1, 2011. .. . .. . $25,500 20,400 -- . 14,800 .. . . . .. ..
Step by Step Answer:
a Net Income 5100 Total Revenue 25500 20 Significance All companies must consume resources incur cos...View the full answer
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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