1. Ratio Analysis (25 marks) < ABC Company's year-end statements of financial position showed the following:...

 

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1. Ratio Analysis (25 marks)< ABC Company's year-end statements of financial position showed the following: 2019< 2018 $35,625 62,500 82,500 9,375< 255,000 445.000 Cash Accounts receivable (net) Inventory Prepaid expenses Plant assets (net)< Total Assets Accounts payable Long-term debts Common shares Retained earnings Total liabilities and equity $30,800 88,500 111,500< 9,700 277,500¹ 518,000< 128,900*¹ 97,500-¹ 162,500 129,100 518,000 CD 75,250¹ 102,150< 162,500 104,750 445,000 2017< $36,800 49,200<¹ 53,000 4,000 229,500< 372,500 49,250 82,500 162,5004¹ 78,250 372,500 Instructions:< a. Compute the current and acid-test ratios of 2019, 2018, and 2017 (5 marks) Compute the debt ratio and debt to equity ratio of 2019, 2018, and 2017 (5 marks)< Comment the trend of liquidity of ABC Company (5 marks)< C. d. Assuming no dividends has been paid in these years, compute the profit of ABC Company within the time period. (5 marks)< Comment on the trend of the profitability of ABC Company. (5 marks)< 1. Ratio Analysis (25 marks)< ABC Company's year-end statements of financial position showed the following: 2019< 2018 $35,625 62,500 82,500 9,375< 255,000 445.000 Cash Accounts receivable (net) Inventory Prepaid expenses Plant assets (net)< Total Assets Accounts payable Long-term debts Common shares Retained earnings Total liabilities and equity $30,800 88,500 111,500< 9,700 277,500¹ 518,000< 128,900*¹ 97,500-¹ 162,500 129,100 518,000 CD 75,250¹ 102,150< 162,500 104,750 445,000 2017< $36,800 49,200<¹ 53,000 4,000 229,500< 372,500 49,250 82,500 162,5004¹ 78,250 372,500 Instructions:< a. Compute the current and acid-test ratios of 2019, 2018, and 2017 (5 marks) Compute the debt ratio and debt to equity ratio of 2019, 2018, and 2017 (5 marks)< Comment the trend of liquidity of ABC Company (5 marks)< C. d. Assuming no dividends has been paid in these years, compute the profit of ABC Company within the time period. (5 marks)< Comment on the trend of the profitability of ABC Company. (5 marks)<

Answer rating: 100% (QA)

Answer of a a b d e f g h 2019 2018 201 IS 30800 35625 3680 S Accounts Receivable 88500 62500 4... View the full answer