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Examine the following balance sheet for YZA Corporation as of December 31, 2023, to evaluate its financial performance and structure. YZA Corporation Balance Sheet As
Examine the following balance sheet for YZA Corporation as of December 31, 2023, to evaluate its financial performance and structure.
YZA Corporation Balance Sheet | As of December 31, 2023 |
---|---|
Assets | |
Current Assets | |
Cash | $55,000 |
Accounts Receivable | $45,000 |
Inventory | $50,000 |
Prepaid Expenses | $10,000 |
Total Current Assets | $160,000 |
Non-Current Assets | |
Property, Plant, and Equipment (PPE) | $300,000 |
Less: Accumulated Depreciation | $100,000 |
Net PPE | $200,000 |
Intangible Assets (Patents) | $40,000 |
Total Assets | $400,000 |
Liabilities and Shareholders' Equity | |
Current Liabilities | |
Accounts Payable | $50,000 |
Short-term Debt | $25,000 |
Accrued Liabilities | $15,000 |
Total Current Liabilities | $90,000 |
Non-Current Liabilities | |
Long-term Debt | $110,000 |
Total Liabilities | $200,000 |
Shareholders' Equity | |
Common Stock | $150,000 |
Retained Earnings | $50,000 |
Total Shareholders' Equity | $200,000 |
Total Liabilities and Shareholders' Equity | $400,000 |
Questions:
- Calculate the current ratio and explain its implications for the company’s ability to meet short-term obligations.
- Determine the debt-to-equity ratio and discuss its significance in evaluating the company’s financial leverage.
- Assess the return on assets (ROA) and explain what it indicates about the company's profitability and asset efficiency.
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