As the accountant for the company, you will need to write a memo to the owner making
Question:
As the accountant for the company, you will need to write a memo to the owner making an analysis of the financial position at December 31st. Make your analysis of the health of the company using the following calculations & ratios:
Working Capital
Current Ratio
Profit Margin
Debt to Equity
Calculate the ratios and explain what they tell us about the company - how can we use them to assess the health of the company.
How does the company compare to others in the industry on the ratios? Assume that the industry average for the ratios is as follows:
Current Ratio 2.5
Profit Margin 38%
Debt to Equity 10%
Last, the owner is thinking about incorporating the business. Give her some advantages and disadvantages of doing so.
Use proper memo format for this portion of the assignment. Complete your memo in Word. Use your most professional business writing, correct grammar and spelling, and be thorough but brief.
Use these Check Figures to see if your calculations are accurate.
Use these numbers to prepare your ratio analysis.
Total Debits (and credits) on Unadjusted Trial Balance = 160,250
Total Debits (and Credits) on Adjusted Trial Balance = 164,250
Net Income on Income Statement = 5,275
Ending Capital (on Stmt of Equity) = 140,725
Total Assets on Balance Sheet = 153,275
Expert Answer:
Memo To Owner From Accountant Date Subject Analysis of Financial Position at December 31st This memo provides an analysis of the financial position of ... View the full answer
