Julio Company has had poor operating results for the past two years. As Julio€™s accountant, you have the following information available to you:

Total assets and owner€™s equity at the beginning of 2013 were $90,000 and $80,000, respectively. The owner made no investments in 2013 or 2014.

Required
1. Compute the following measures of liquidity for 2013 and 2014:
(a) Working capital
(b) Current ratio.
Comment on the differences between the years. (Round to one decimal place.)
2. Compute the following measures of profitability for 2013 and 2014:
(a) Profit margin,
(b) Asset turnover,
(c) Return on assets,
(d) Debt to equity ratio,
(e) Return on equity.
Comment on the change in performance from 2013 to 2014. (Round to one decimalplace.)

Transcribed Image Text:

2014 45,000 145,000 20,000 20,000 105,000 262,000 16,000 2013 35,000 110,000 10,000 Current assets Total assets Current liabilities Long-term liabilities Owner's equity Net sales Net income 100,000 200,000 11,000