Costner Company has been operating for several years, and on December 31, 2012, presented the following balance

Question:

Costner Company has been operating for several years, and on December 31, 2012, presented the following balance sheet.

The net income for 2012 was $25,000. Assume that total assets are the same in 2011 and 2012.

Instructions
Compute each of the following ratios. For each of the four, indicate the manner in which it is computed and its significance as a tool in the analysis of the financial soundness of the company.

  (a) Current ratio.                (c) Debt to total assets.
  (b) Acid-test ratio.              (d) Rate of return on assets.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0470587287

14th Edition

Authors: kieso, weygandt and warfield.

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