Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance

Question:

Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance sheet.

The net income for 2025 was $25,000. Assume that total assets are the same in 2024 and 2025.

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 (round answers to two decimal points).

a. Current ratio.

b. Acid-test ratio.

c. Debt to assets ratio.

d. Return on assets.

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Related Book For answer-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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Question Posted: Jun 27, 2023 06:20 AM

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Sprague Company has been operating for several years, and on December 31, 2025, presented the following balance

Question:

Cash Receivables Inventory Plant assets (net) Sprague Company Balance Sheet December 31, 2025 $ 40,000 75,000 95,000 220,000 $430,000 Accounts payable Mortgage payable Common stock ($1 par) Retained earnings $80,000 140,000 150,000 60,000 $430,000

Step by Step Answer:

Li a b c Current Ratio Current Assets Current Liabilities Acidtest ratio 40000 75000 95000 Curre...View the full answer

Intermediate Accounting

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