Arun Company has had poor operating results for the past two years. As the accountant for Arun Company, you have the following information available to you:

Total assets and owner's equity at the beginning of 2009 were $45,000 and $40,000 respectively. The owner made no investments in 2009 or 2010.

Required
1. Compute the following measures of liquidity for 2009 and 2010:
(a) Working capital and
(b) Current ratio. Comment on the differences between the years.
(2) Compute the following measures of profitability for 2009 and 2010:
(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 2009 to2010.

2010 2009 22.500 72.300 10,000 10,000 52.500 131.000 8,000 S 17.500 55.000 5,000 Curreit asscts Total assees Curren iabilitics Long term labilities Owner's equity Ner sales Ne income 50,000 100.000 5.500 3.3