Question
Poirot Enterprises Using the following Profit and Loss Statement, and Balance Sheet to Create a Statement of Cash Flows The CEO of Poirot Enterprises has
Poirot Enterprises
Using the following Profit and Loss Statement, and Balance Sheet to Create a Statement of Cash Flows
The CEO of Poirot Enterprises has provided you with the following balance sheet for the years ended 1 and 2.
Along with the balance sheet, the CEO has provided you with his notes from the most recent meeting of Poirots Finance and Audit Committee, as follows:
- Net After-Tax income for the year ended 2 was $141,000, and dividends paid were $10,000.
- A recent market value assessment of the land that is owned by Poirot has stated that it is now worth $300,000. The President of Poirot is very excited about this new information!
The President has learned that you recently completed an accounting course at NU Beginnings University.
He has asked you to complete a Statement of Cash Flows (using the indirect method) for the period ending Year 2.
You have also been asked to calculate the following financial ratios:
- Current and Quick Ratio (years 1 and 2)
- Return on Equity (Year 2 only)
- Debt-to-Equity (years 1 and 2)
Has Poirots ratios improved over the past year? Justify your answer.
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