a. Return on equity

b. Total assets turnover

c. Return on assets

d. Current ratio

e. Receivables turnover

Transcribed Image Text:

There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Assets Liabilities Current Assets: Current Liabilities: 700,000 500,000 Cash 500,000 Accounts Payable 300,000 Notes Payable Accounts Receivable Inventory Total Current Assets 800,000 1,300,000 Total Current Liabilities 1,200,000 Fixed Assets: Owners' Equity: 2,200,000 Common Stock (S1 Par) 600,000 Capital Surplus 1,600,000 Retained Eamings 2,900,000 Total Owners' Equity Property, Plant & Equipment Less: Accumulated Depreciation 600,000 100,000 100,000 Net Fixed Assets Total Assets 800,000 Total Liabilities and Owners' 2,900,000 Equity Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales 3,400,000 2,700,000 700,000 682.000 (682,000) 120.000 (802,000) (280.000) (522,000) Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income Dividends Addition to Retained Eamings (522.000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result. There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Assets Liabilities Current Assets: Current Liabilities: 700,000 500,000 Cash 500,000 Accounts Payable 300,000 Notes Payable Accounts Receivable Inventory Total Current Assets 800,000 1,300,000 Total Current Liabilities 1,200,000 Fixed Assets: Owners' Equity: 2,200,000 Common Stock (S1 Par) 600,000 Capital Surplus 1,600,000 Retained Eamings 2,900,000 Total Owners' Equity Property, Plant & Equipment Less: Accumulated Depreciation 600,000 100,000 100,000 Net Fixed Assets Total Assets 800,000 Total Liabilities and Owners' 2,900,000 Equity Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales 3,400,000 2,700,000 700,000 682.000 (682,000) 120.000 (802,000) (280.000) (522,000) Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income Dividends Addition to Retained Eamings (522.000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result.

Answer rating: 100% (QA)

a Return on Equity ROE Net IncomeShareholders Equity Net Income 522000 Shareholders Equity 600000 RO... View the full answer