Dog Daze, Inc. has provided the following information from its most current financial statements: a. Compute the
Question:
Dog Daze, Inc. has provided the following information from its most current financial statements:
a. Compute the companyâ€™s net income percentage in 2011.
b. Compute the companyâ€™s return on equity in 2011.
c. Compute the companyâ€™s current ratio at December 31,2011.
Total revenue Total expenses Total current assets Total current liabilities Total stockholders' equity, January 1, 2011 Total stockholders' equity, December 31, 2011 $60,000 45,000 16,000 4,000 37,000 38,000
Step by Step Answer:
a Net Income 15 000 Total Revenue 60 000 25 b Net Income 15 000 Averag…View the full answer
Financial and Managerial Accounting the basis for business decisions
ISBN: 9780078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its shortterm obligations with its shortterm assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its shortterm obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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