Compute the following ratios for 2018 and 2019. Show your solution.
1. Current Ratio                                 9. Interest Coverage Ratio
2. Quick Ratio                                     10. Gross Profit Ratio
3. A/R Turnover Ratio                        11. Profit Margin Ratio
4. Days in Accounts Receivable         12. Return on Assets
5. Inventory Turnover Ratio               13. Return on Equity
6. Days in Inventory                           14. Asset Turnover Ratio
7.Debt to Total Assets Ratio               15. Fixed Asset Turnover
8. Debt to Equity Ratio

  

2- What effect would the following transactions have on the firm's current ratio (and state the resulting figures)?

1. Hanson Neil Tyzer Company has current assets of P800,000 and current liabilities of P500,000.

a. Two new trucks are purchased for a total of P100,000 in cash.

b. The company borrows P100,000 short term to carry an increase in receivables of the same amount.

c. Additional common stock of P200,000 is sold and the proceeds invested in the expansion of several terminals.

d. The company increases its accounts payable to pay a cash dividend of P40,000 out of cash.

Transcribed Image Text:

Assets RAP Company COMPARATIVE STATEMENT OF FINANCIAL POSITION For the Year 2018 & 2019 Liabilities Cash Accounts Receivable Trading Securities Inventories Prepaid Expenses Total Current Assets Total Non-Current Assets Total Assets Total Current Liabilities Total Non-Current Liabilities Owner's Equity Total Owner's Equity Total Liabilities & OE 2019 400,000 100,000 20,000 80,000 20,000 620,000 300,000 920,000 50,000 450,000 420,000 920,000 2018 290,000 120,000 40,000 60,000 10,000 520,000 200,000 720,000 100,000 320,000 300,000 720,000 Assets RAP Company COMPARATIVE STATEMENT OF FINANCIAL POSITION For the Year 2018 & 2019 Liabilities Cash Accounts Receivable Trading Securities Inventories Prepaid Expenses Total Current Assets Total Non-Current Assets Total Assets Total Current Liabilities Total Non-Current Liabilities Owner's Equity Total Owner's Equity Total Liabilities & OE 2019 400,000 100,000 20,000 80,000 20,000 620,000 300,000 920,000 50,000 450,000 420,000 920,000 2018 290,000 120,000 40,000 60,000 10,000 520,000 200,000 720,000 100,000 320,000 300,000 720,000

Answer rating: 100% (QA)

The first part of the question requires calculating various financial ratios for the year 2018 and 2... View the full answer