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.

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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