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ABC financial ratios towards the year-end are as follows: Current ratio = 1.68 Debt ratio = 0.64 Return on investment (return on assets) = 12%
ABC financial ratios towards the year-end are as follows: Current ratio = 1.68 Debt ratio = 0.64 Return on investment (return on assets) = 12% Return on equity = 28% For the purpose of this exercise, let's assume the following: ROI = Net income / end. total assets ROE = Net income / end. equity Assuming the following independent transaction take place just before the year-end, what would be the impact on these ratios? Transaction 1: Obtained a long-term bank loan to purchase PPE Transaction 2: Pay cash for rent expense Transaction 3: Recognise a depreciation expense on an equipment Transaction 4: Raised additional funds through issuance of shares
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