1. Yadier NV's comparative statements of financial position are presented below. Land Buildings Accumulated Depreciation Inventory Accounts Receivable Cash Total 2018 22000 70000 (5,000) 12000 20000 1000 120000 2019 26,000 70,000 (10,000) 7,000 24,000 3,700 120700 2020 20,000 70,000 (15,000) 10,000 22,000 4,300 111300 Share Capital-Ordinary Retained Earnings Accounts Payable Total 62000 19000 39000 120000 69,000 20,600 31,100 120,700 72,000 24,300 15,000 111,300 Income statement Net sales COGS Net Income 2018 88000 49000 2000 2019 95000 59000 10000 2020 100000 60350 14000 Instructions: A. Calculate the ratios for 2020 2020 a. Current Ratio b. Acid-test Ratio c. Accounts Receivable Ratio d. Inventory Turnover e Profit Margin f. Asset Turnover 8. Return on Assets ih Debt to asset ratio financial leverage) 2019 1.12 0.89 4.32 6.21 11% 0.789 896 269 ? 2 2 P 2 B Based on the ratios of 2019 & 2020, comment on Liquidity, Profitability and the solvency (financial risk) (6 Marks) 2. Rowlands Corporation has 100,000 shares of $40 par value preferred stock authorized. During the year, it had the following transactions related to its preferred stock. (a) Issued 20,000 shares at $55 per share, (b) Issued 10,000 shares for equipment having a $700,000 asking price. The stock had a market value of $75 per share Instructions Journalize the transactions. Financial Ratios Ratio Formula Liquidity Ratios 1. Current ratio Current assets Current liabilities 2. Acid-test (quick) ratio Cash + Short-term investments + Accounts receivable (net) Current liabilities 3. Accounts receivable turnover Net credit sales Average net accounts receivable Cost of goods sold Average inventory 4. Inventory turnover Profitability Ratios 5. Profit margin Net income Net sales 6. Asset turnover Net sales Average total assets Net income Average total assets 7. Return on assets 8. Return on common stockholders' equity Net Income - Preferred dividends Average common stockholders' equity 9. Earnings per share (EPS) Net income - Preferred dividends Weighted average common shares outstanding Solvency Ratios 10. Debt to assets ratio Total Liabilities Total Assets 11 Times interest earned Income before income taxes and interest expense Interest expense