Question
Statement of Financial Position December 31, 2021 December 31, 2022 Assets Current assets Cash $ 50,000 $ 40,000 Accounts receivable 100,000 120,000 Inventory 120,000 70,000
Statement of Financial Position
December 31, 2021
December 31, 2022
Assets
Current assets
Cash
$ 50,000
$ 40,000
Accounts receivable
100,000
120,000
Inventory
120,000
70,000
Total current assets
270,000
230,000
Net fixed assets
400,000
420,000
Total assets
$ 670,000
$ 650,000
Liabilities and shareholders' equity
Current liabilities
Accounts payable
$ 50,000
$ 70,000
Notes payable
40,000
30,000
Total current liabilities
90,000
100,000
Long-term debt
130,000
90,000
Shareholders' equity
Common shares
100,000
100,000
Retained earnings
350,000
360,000
Total shareholders' equity
450,000
460,000
Total liabilities and
shareholders' equity
$ 670,000
$ 650,000
Statement of Comprehensive Income
For the year ended December 31, 2022
Sales
$ 200,000
Cost of goods sold
120,000
Depreciation expense
30,000
EBIT
50,000
Interest expense
5,000
Earnings before taxes
45,000
Income taxes (40%)
18,000
Net income
$ 27,000
a. Choose and calculate the most relevant ratio for year 2022, if you would like to
understand the companys liquidity in general. Show your work.
b. Choose and calculate the most relevant ratio for year 2022, if you would like to
understand the companys liquidity by focusing only on the cash component of its assets.
Show your work.
c. Choose and calculate the most relevant ratio for year 2022, if you would like to
understand how much profit the company generated on its equity. Show your work.
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Fixed Income Markets And Their Derivatives
Authors: Suresh Sundaresan
3rd Edition
0123850517, 978-0123704719
