Symbols Pictures Tables Illustrations XL 121. 345. 6 Video Media Link Comment lett Page Number Comments Header & Footer 10 13:15 Question 5: (18 marks) (Suggested time: 40 minutes) The financial statements for the year ended December 31, 2019 of Gamert Company are shown below. The CEO of Gamert Company cannot understand the reasons that Garnert is having problems in paying current obligations. He notes that business has been very good, as sales have more than doubled, and the company achieved a profit of $69,000 in 2019. GARNERT COMPANY BALANCE SHEET December 31, 2019 and 2018 2019 2018 Assets Cash Accounts receivable, net Inventory Prepaid expenses Land Building. Accumulated depreciation Total assets 5,000 92,000 130,000 4,000 30,000 170,000 (20.000) 28,000 70,000 85,000 6,000 10,000 30,000 (10,000) 219.000 S 411.000 S. w 49.000 Shareholders' Equity.... 36,000 $ $ Accounts receivable, net nventory Prepaid expenses Land Building Accumulated depreciation Total assets 5,000 92,000 130,000 4,000 30,000 170,000 (20,000 411.000 28,000 70,000 85,000 6,000 10,000 30,000 (10,000) 219.000 $ $ Liabilities and Shareholders' Equity Account payable Income taxes payable Accrued liabilities Current maturities of long term debt Bonds Payable Ordinary shares Retained earnings 49,000 .......... 5,000 6,000 10,000 165,000 106,000 70,000 36,000 4,000 5,000 8,000 20,000 96,000 50,000 5 of 8 25 of 1596 words D English (United States) -- + 1009 E NG 2:57 PM NG 22 Pages Table Add Links Comment Text Symbols Pictures Online Shape Pictures Ilustrations Online Video Media A Footer Page Number Header Footer Tables Comments GARNERT COMPANY INCOME STATEMENT For Year Ended December 31, 2019 500,000 Sales Less expenses Cost of goods sold Selling and administrative expenses Interest expense Total expenses Income before taxes Income tax expense Net Income 310,000 80,000 11,000 401.000 99,000 30,000 69.000 Required *Compute the following lipidity ratios for 2019 02 marks) 1. Current ratio 2 Ach testato Compete the following sets mangement ratios for 2019 (2 marks) 2. A l lection in days Compte the following debt ratios for 2019 (2 marks) FRIUL + ins Pictures - Illustrations Video Media Page Number Header & Footer Tables Comments 9 10 11 20 119 118 117 116 115 114.1-13 112 Required a. Compute the following liquidity ratios for 2019: (2 marks) 1. Current ratio 2. Acid-test ratio b. Compute the following assets management ratios for 2019: (2 marks) 1. Inventory turnover 2. Average collection in days c. Compute the following debt ratios for 2019: (2 marks) 1. Times interest earned 2. Debt ratio d. Compute the following profitability ratios for 2019: (2 marks) 1. Return on assets 2. Return on ordinary equity e. Analyze the liquidity of Garnert. Why do the ratios seem to be good but the company has difficulty in meeting short term debts? (2 marks) f. Analyze the asset management of Garnert. (2 marks) Gamart (2 marks) 16 17 18 Tulowing debt ratios for 2019: (2 marks) 1. Times interest earned 2. Debt ratio d. Compute the following profitability ratios for 2019: (2 marks) 1. Return on assets 2. Return on ordinary equity e. Analyze the liquidity of Gamert. Why do the ratios seem to be good but the company has difficulty in meeting short term debts? (2 marks) f. Analyze the asset management of Gamert. (2 marks) I g. Analyze the debt position of Gamert (2 marks) h. Analyze the profitability of Garnert. (2 marks) j. Give your opinion of the strategies Garnert should implement in order to ensure that it can pay bills as they come due. (2 marks) 20L:19 24.123. 1221.21: Page 6 of 8 25 0 - 100% Page 6 of 8 1596 words 1 English (United States)