Kawani Corporation has been operating for several years. On December 31, 2017, it presented the following statement

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Kawani Corporation has been operating for several years. On December 31, 2017, it presented the following statement of financial position.
Kawani Corporation has been operating for several years. On December

Cost of goods sold in 2017 was $420,000, operating expenses were $51,000, and net income was $27,000. Accounts payable suppliers provided operating goods and services. Assume that total assets are the same in 2016 and 2017.
Instructions
Calculate each of the following ratios:
(a) Current ratio
(b) Acid-test ratio
(c) Debt to total assets ratio
(d) Rate of return on assets
(e) Days payables outstanding
For each ratio, also indicate how it is calculated and what its significance is as a tool for analyzing Kawani's financial position, profitability, and liquidity.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119048541

11th Canadian edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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