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Consider the following financial statement data:
Assume that the average of all balance sheet items is equal to the yearend figure and that all sales are on credit.
Required:
- Calculate the following ratios:
- Return on total assets (assume interest has been paid)
- Return on shareholders’ equity
- Times interest earned ratio
- Earnings per share
- Number of days of sales in inventory
- Accounts receivable collection period
- Sales to total assets ratio
- Current ratio
- Acid-test ratio
- Debt to shareholders’ equity ratio.
- Which of these ratios are measures of liquidity?
- (Appendix) Restate the financial statements to facilitate Scott formula analysis.
- (Appendix) Calculate the Scott formula.
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