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The following information is taken from the partial balance sheet of Quail Productions Corp. 2018 2017 Current assets Cash $ 10 $ 15 Marketable investments
- The following information is taken from the partial balance sheet of Quail Productions Corp.
2018 2017
Current assets
Cash | $ 10 | $ 15 |
Marketable investments | 35 | 35 |
Accounts receivable | 200 | 150 |
Inventory | 600 | 400 |
Current liabilities
Accounts payable 500 400
Borrowings 245 180
Required:
- calculate the current ratio for each year. (1 marks)
- describe the purpose of the current ratio (1 Mark)
- What observations can you make from a comparison of the two types of ratios? (2 Marks)
- Why do External users evaluate Financial Statements? (1 Mark)
- 17. Why do Internal users evaluate Financial Statements (1 Mark)
- What do trends indicate? Give an example (2 marks)
- Which sections of the financial statements would bankers be most interested in? Why? (2 Marks)
- Which sections of the financial statements would someone wanting to buy the shares of Sandra Kaur be most interested in? Why? ( 2 marks)
- What can a corporation do with its retained earnings. ( 3 Marks)
- __________ a snapshot of the financial condition of the firm at a particular time.
A. The balance sheet provides B. The income statement provides C. The statement of cash flows provides D. All of the above provide E. None of the above provides
- ____________________of the profitability of the firm over a period of time such as a year. A. The balance sheet is a summary B. The income statement is a summary C. That statement of cash flows is a summary D. The audit report is a summary E. None of the above is a summary
- Profitability ratios measure:
- Various levels of return on sales
- Total assets employed
- Shareholder investment
- All of the above
- Financial ratios are based on:
- The future performance
- Future expected cash flows
- Past performance.
- Data provided by IFRS.
12. Retained Earning increases by adding
a) accounts receivable
b) dividends
c) Net income
d) Liabilities
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