A summary of data from the income statements and balance sheets for Okumura Construction Supply Company for 20x8 and 20x7 appears below.

Total assets and owner's equity at the beginning of 20x7 were $1,360,000 and $840,000, respectively?
Required
1. User Insight: Compute the following liquidity measures for 20x7 and 20x8:
(a) Working capital and
(b) Current ratio. Comment on the differences between the years.
2. User Insight: Compute the following measures of profitability for 20x7 and 20x8:
(a) Profit margin,
(b) Asset turnover,
(c) Return on assets,
(d) Debt to equity ratio, and
(e) Return on equity. Comment on the change in performance from 20x7 to 20x8.

Transcribed Image Text:

20x8 20x7 Current assets Total assets Current liabilities Long-term liabilities Owner's equity Net sales Net income 366,000 310,000 2,320,000 ,740,000 120,000 580,000 340,000 ,040,000 4,600,000 3,480,000 204,000 180,000 800,000 300,000