4. Using the financial statements for Rockford Inc. on page 125-126 of the textbook, choose five financial ratios to calculate for 2012 to evaluate the current financial performance of the organization.Show your calculations using the appropriate formulas, interpret the results, and explain why you chose to use those ratios as indicators of finanical performance.

es 125 and 126 on capital employed Has improved from 40.3% to 56.4% Has worsened from 56.4% to 40.3% les improved from 46.3% to 57.6% Is worsened from 57.6% to 40.3% (liquidity and Leveraging Ratios) In reviewing liquidity and leveraging ratios for Acorn ires Inc., we can say that Long-term debt has increased as a proportion of total capital employed, and liquidity has proved due to the decrease in current liabilities. Long-term debt has decreased as a proportion of total capital employed, and liquidity has dained due to the increase in current liabilities. Long-term debt has increased as a proportion of total capital employed, and liquidity has worsened due to the increase in current liabilities. Long-term debt has decreased as a proportion of total capital employed, and liquidity has improved due to the decrease in current liabilities. 90 (Calculation of Ratios) Fortune Stationers is open 250 days each year and last year sred sales of $9 million with a gross profit of 60% of sales. At the end of the year, Fortune's ment of financial position showed Accounts receivable $1,200,000 daventory 450,000 Sccounts payable 1,400,000 late (a) the days' sales outstanding, (b) inventory turnover, (c) days' inventory held, and days' purchases outstanding. 11 (Calculation and Interpretation of Ratios) Rockford Inc. is a retail chain with 160 stores 14,000 employees. Its financial statements for 2012 are shown below: Rockford Inc. Statement of Comprehensive Income (in $millions) 2012 Turnover $1,021.5 Cost of sales -855.3 Gross profit 166.2 Administrative expenses -47.9 Operating profit 118.3 Xet interest payable Profit on ordinary activities before taxes 117.4 Taxes -30.7 Profit on ordinary activities after taxes 86.7 Dividends -33.3 Profit retained for the period $53.4 2011 $847.4 -710.4 137.0 -29.1 107.9 -0.3 107.6 -33.5 74.1 -29.3 $44.8 -0.9 126 PARTI CONTEXT OF ACCOUNTING Additional information: 21.30 18.4 Earnings per sbare 440 million shares were issued at 100 each: Market value of shares $1.50 $1.40 2011 $32.3 132.3 25.7 190.3 Rockford Inc. Statement of Financial Position (in Smillions) 2012 Non-current assets Goodwill $37.3 Property, plant, & equipment 167.6 Investments 22.5 227.4 Current assets Inventory 135.0 Accounts receivable 22.5 Cash at bank. 16.2 173.7 Total assets 401.1 Non-current liabilities Long-term loans 14.8 Provision for deferred taxes 9.5 24.3 Current liabilities Accounts payable 159.8 Total liabilities 184.1 Net assets $217.0 Equity Share capital 44.0 Retained earnings 173.0 Shareholders' equity $217.0 105.3 20.8 17.8 143.9 334.2 13.4 7.6 21.0 149.6 170.6 $163.6 44.0 119.6 $163.6 Calculate sufficient ratios for both 2012 and 2011 to demonstrate the changes in profitabil liquidity, efficiency, leveraging, and shareholder return of Rockford, and comment on the m important changes between 2012 and 2011. P5.12 (Interpretation of Ratios) Ratunga Inc. manufactures and sells office furniture to business It is listed on a stock exchange. A ratio analysis of its statement of comprehensive inco and statement of financial position over the last four years has identified the following trends: Sales growth Return on investment (ROI) Return on capital employed (ROCE) Operating profit/sales 2012 10.0% 5.0% 4.0% 6.0% 2011 8.5% 4.896 4.5% 6.3% 2010 8.0% 4.5% 5.0% 6.5% 2009 7.0% 4.1% 5.3% 6.7% (continued)