The financial statements of Rose Corporation appear below:

Rose Corporation

Comparative Balance Sheets

December 31, 2018 - 19

Assets 2019 2018

Cash $600,000 $ 1,200,000

Short-term investments 600,000 1,800,000

Accounts receivable (net) 1,200,000 900,000

Inventory 1,800,000 2,100,000

Property, plant and equipment (net) 7,800,000 9,000,000

Total assets $12,000,000 $15,000,000

Liabilities and stockholders' equity

Accounts payable $600,000 $ 900,000

Short-term notes payable 1,200,000 2,700,000

Bonds payable 2,400,000 4,800,000

Common stock 4,500,000 4,500,000

Retained earnings 3,300,000 2,100,000

Total liabilities and stockholders' equity $12,000,000 $15,000,000

Rose Corporation

Income Statement

For the Year Ended December 31, 2019

Net sales $12,000,000

Cost of goods sold 7,500,000

Gross profit 4,500,000

Expenses

Operating expenses $1,260,000

Interest expense 540,000

Total expenses 1,80,000

Income before income taxes 2,700,000

Income tax expense 810,000

Net income $ 1,890,000

Required:

(a) Using the financial statements, compute the following ratios for Rose Corporation for 2019. Show all computations.

1. Current ratio.

2. Acid-test ratio.

3. Accounts receivable turnover.

4. Inventory turnover.

5. Profit margin.

6. Return on assets.

7. Assets turnover.

8. Times interest earned.

9. Working capital.

10. Debt to assets ratio.

(b) Based on the ratios calculated in (a), discuss briefly the improvement or lack thereof in financial position and operating results from 2018 to 2019 of Rose Corporation.