1 Balance Sheet 20X2 2 20X1 3 4 5 Assets Cash Accounts Receivable Inventory Property, plant & equipment Total assets 6 40,000 30,000 110,000 250,000 430,000 10,000 55,000 70,000 257,000 392,000 Income Statement for the year ended December 31, 20X2 Sales on account 420,000 Less expenses: Cost of goods sold 214,000 Salary expense 50,000 Depreciation expense 7,000 Interest expense 9,000 Total expenses 280,000 Income before taxes 140,000 Income tax expense (50%) 70,000 Net Income 70,000 7 8 9 20X2 20X1 10 11 12 13 Liablilitites & Stockholders' Equity Current Liabilities 5% Mortage payable Common stock (30,000 shares) Retained earnings Total liabilities & stockholders' equity 14 60,000 120,000 150,000 100,000 430,000 50,000 162,000 150,000 30,000 392,000 15 16 17 18 19 20 Required A: Complete the following ratios for Rock Inc. for the year ended December 31, 20X2: 1. Profit margin ratio 2. Total asset turnover 21 11. Times interest earned 6. Inventory turnover 7. Current ratio 22 Required B: MOST IMPORTANTLY - comment, in detail, on the health of the 23 3. Return on assets 8. Quick ratio company and write a comprehensive memo on operating recommendations. 24 4. Return on equity 9. Accounts receivable turnover 25 5. Earnings per share 10. Debt to equity ratio