Refer to Exercise 8 Required How would each difference affect the balance sheet and income statement How would each difference affect the following financial ratios used by analysts a Liquidity current ratio b Solvency debt to equity debt to assets c Profitability return on assets return on equity

Question: Refer to Exercise 8. Required: How would each difference affect the balance sheet and income statement? How would each difference affect the following financial ratios

Refer to Exercise 8.
Required:
How would each difference affect the and income statement?
How would each difference affect the following used by analysts?
a. Liquidity: current ratio
b. Solvency: debt to equity; debt to assets
c. Profitability: return on assets; return on equity

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