Question
Sprague Company has been operating for several years, and on December 31, 207, presented the following balance sheet. SPRAGUE COMPANY BALANCE SHEET DECEMBER 31, 2014
Sprague Company has been operating for several years, and on December 31, 207, presented the following balance sheet. SPRAGUE COMPANY BALANCE SHEET DECEMBER 31, 2014 Cash $40,000 Accounts payable $80,000 Receivables 75000 Mortgage payable 140,200 Inventory 95000 Common stock ($1 par) 150,000 Plant assets (net) 220,000 Retained earnings 60,000 430000 The net income for 2017 was $25,000. Assume that total assets are the same in 2016 and 2017. Compute each of the following ratios. for each of the four, indicate the manner in which it is computed and its significance as tool in the analysis of the financial soundness of the company a) Current ratio b) Acid-test ratio c) Debt to assets ratio d) Return on asset
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