The simplified balance sheet and income statement for a corporation follow. 

Total assets and stockholders’ equity at the beginning of 2010 were $180,000 and $140,000, respectively. 

1. Compute the following liquidity measures: (a) working capital and (b) current ratio. 

2. Compute the following profitability measures: (a) profit margin, (b) asset turnover, (c) return on assets, (d) debt to equity ratio, and (e) return on equity

Transcribed Image Text:

Balance Sheet December 31, 2010 Liabilities Assets $ 55,000 10,000 $ 25,000 Current assets Current liabilities Investments Long-term liabilities Total liabilities 30,000 $ 55,000 Property, plant, and equipment Intangible assets 146,500 18,500 Stockholders' Equity Common stock $100,000 Retained earnings 75,000 Total stockholders' $175,000 equity Total liabilities and Total assets $230,000 stockholders equity $230,000 Income Statement For the Year Ended December 31, 2010 Net sales $415,000 Cost of goods sold Gross margin Operating expenses 250,000 $165,000 130,000 $ 35,000 5,000 $ 30,000 Income before income taxes Income taxes expense Net income