Determine the current liabilities to net worth ratio for the construction company in Figures 6-3 and 6-4. What insight does this give you into the company€™s financial operations?
FIGURE 6-3 Balance Sheet for Eastside Contractors
EASTSIDE CONTRACTORS
BALANCE SHEET

FIGURE 6-4 Income
Statement for Eastside Contractors
EASTSIDE CONTRACTORS
INCOME STATEMENT
REVENUES .............. 2,225,379
CONSTRUCTION COSTS
Materials ................. 414,840
Labor ................. 564,783
Subcontract ................ 932,250
Equipment ............... 68,506
Other ................. 2,761
Total Construction Costs .......... 1,983,140
EQUIPMENT COSTS
Rent and Lease Payments ......... 21,654
Depreciation ............... 18,203
Repairs and Maintenance .......... 10,805
Fuel and Lubrication ........... 16,982
Taxes, Licenses, and Insurance ....... 862
Equipment Costs Charged to Jobs ...... 68,506
Total Equipment Costs ........... 0
GROSS PROFIT ............. 242,239
OVERHEAD ................ 207,805
NET PROFIT FROM OPERATIONS .... 34,434
OTHER INCOME AND EXPENSE ...... 7,813
PROFIT BEFORE TAXES ......... 42,247
INCOME TAX ............. 7,774
PROFIT AFTER TAXES ......... 34,473

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