Condensed statement of financial position and income statement data for Pitka Corporation follow: Additional information: 1. The
Question:
Condensed statement of financial position and income statement data for Pitka Corporation follow:
Additional information:
1. The allowance for doubtful accounts was $4,800 in 2010, $4,500 in 2011, and $5,000 in 2012. All sales were credit sales. Net cash provided by operating activities was $119,600 in 2011 and $102,000 in 2012.
Instructions
(a) Calculate the following ratios for each of 2011 and 2012:
1. Current ratio
2. Receivables turnover
3. Inventory turnover
4. Debt to total assets
5. Times interest earned
6. Cash total debt coverage
7. Return on assets
8. Profit margin
9. Asset turnover
10. Gross profit margin
(b) Identify whether the change in each ratio from 2011 to 2012 was favourable, unfavourable, or unchanged.
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine