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The accounting department of your company has just delivered a draft of the current year's financial statements to you. The summary is as follows: Beginning
The accounting department of your company has just delivered a draft of the current year's financial statements to you. The summary is as follows:
Beginning of the Year | End of the Year | |
Total Assets | $550,000 | $563,000 |
Total Liabilities | 210,000 | 200,000 |
Total Equity | 340,000 | 363,000 |
Net Income for the Year | 81,000 | |
Common Shares Outstanding | 21,000 | 21,000 |
You discovered that they have not adjusted for estimated bad debt expenses of $7,600. For each of the following ratios, calculate:
1. The ratio that would have resulted had the error not been discovered (i.e. the incorrect ratio).
2. The correct ratio.
A
B
C
D
E
1
2
3
4
5
6
7
8
9
10
Incorrect: | Correct: | |||
ROA | ||||
ROE | ||||
Debt Ratio | ||||
EPS | ||||
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