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

Total assets and owners equity at the beginning of 2010 were $900,000 and $80,000, respectively. The owner made no investments in 2010 or 2011.

Required
1. Compute the following measures of liquidity for 2010 and 2011:
(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 2010 to2011.

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2011 2010 S 45,000 Current assers Toral asscts Current liabilities S 35,000 110,000 10,000 Long-term liabilities Owner's equity Net sales Net income 145,000 20,000 20,000 105,000 262,000 16,000 100,000 200,000 11,000