Chen Group has been operating for several years, and on December 31, 2022, presented the following statement of financial position amounts in thousands.

The net income for 2022 was ¥25,000. Assume that total assets are the same in 2021 and 2022.

Instructions

Compute each of the following ratios. For each of the four, indicate the manner in which it is computed and its significance as a tool in the analysis of the financial soundness of the company.

a. Current ratio.

b. Acid-test ratio.

c. Debt to assets.

d. Return on assets.

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Chen Group Statement of Financial Position December 31, 2022 Plant assets (net) Y220,000 Share capital-ordinary Y160,000 Chen Group Statement of Financial Position December 31, 2022 Inventory 95,000 Retained earnings 60,000 Receivables 75,000 Mortgage payable 140,000 Cash 40,000 Accounts payable 70,000 ¥430,000 ¥430,000