Epsilon Tech Solutions

Scenario: Ratio Analysis

Data:

• Current Year:
  • Current Assets: $200,000
  • Current Liabilities: $100,000
  • Total Assets: $500,000
  • Total Liabilities: $300,000
  • Net Income: $50,000

• Previous Year:
  • Current Assets: $180,000
  • Current Liabilities: $90,000
  • Total Assets: $450,000
  • Total Liabilities: $270,000
  • Net Income: $45,000

Requirements:

1. Calculate the current ratio and quick ratio for both years.
2. Calculate the debt-to-equity ratio and return on equity for both years.
3. Analyze Epsilon Tech Solutions' financial performance using these ratios.
4. Discuss the trends and changes in financial ratios over the two years.