Question
Find below the Balance Sheet and the Income Statement of a company. All values are in CAD (Canadian Dollars). Balance Sheet Assets Cash 75 Accounts
Find below the Balance Sheet and the Income Statement of a company. All values are in CAD (Canadian Dollars). Balance Sheet Assets Cash 75 Accounts Receivables 150 Inventory 175 Equipment 1,200 Accumulated Depreciation (100) Total Assets 1,500 Liabilities and Owners Equity Accounts Payables 600 Long-Term Debt 500 Total Liabilities 1100 Owners Equity Common Stock 200 Retained Earnings 200 Total Liabilities and Owners Equity 1,500 Income Statement Sales (All Credit) 2,000 Cost of Goods Sold (1,200) Gross Profits 800 Marketing and Administration 80 Depreciation 70 Total Operating Expenses 150 Operating Profits 650 (EBIT or Operating Income) Interest Expense 50 Income Before Taxes 600 Taxes 100 Net Income 500 Required: Calculate the appropriate financial ratios to answer the following questions. 1. How liquid is a firm? 2. Is management generating adequate operating profits on the firms assets? 3. How is the firm financing its assets? 4. Is management providing a good return on the capital provided by the shareholder? NO CALCULATION OF MARKET VALUE RATIOS.
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