There was a bit of concern about one of RBL$$s newer entities $$ RBL Paving Company.

Management wants you to review the two financial statements below and give your

analysis of the company$$s performance.

RBL Paving Company

Assets Liabilities

Current Assets: Current Liabilities:

Cash $200,000$ Accounts Payable $700,000$

Accounts Receivable $300,000$ Notes Payable $600,000$

Inventory $800,000$

Total Current Assets $1,300,000$ Total Current Liabilities $1,300,000$

Fixed Assets: Owners$$ Equity:

Property, Plant & Equipment $2,200,000$ Common Stock $($$$1$ Par$)600,000$

Less: Accumulated Depreciation $600,000$ Capital Surplus $100,000$

Net Fixed Assets $1,600,000$ Retained Earnings $100,000$

Total Assets $2,900,000$ Total Owners$$ Equity $800,000$

Total Liabilities and Owners$$

Equity

$2,900,000$

RBL Paving Company

Income Statement for Year Ending December $31,2021$

Sales $3,400,000$

Less: Cost of Goods Sold $2,700,000$

Less: Administrative Expenses $700,000$

Less Depreciation $682,000$

Earnings Before Interest and Taxes $(682,000)$

Less: Interest Expense $120,000$

Taxable Income $(802,000)$

Less: Taxes $(280,000)$

Net Income $(522,000)$

Dividends $0$

Addition to Retained Earnings $(522,000)$

Required: Evaluate the performance of RBL Paving Company using the below

ratios. Define each ratio, perform the calculation, and provide an explanation of the

result.

a$.$ Return on equity

b$.$ Total assets turnover

c$.$ Return on assets

d$.$ Current ratio

e$.$ Receivables turnover