RXL Electronics Company, located in Southern Ontario, manufactures precision measuring devices to monitor exhaust emission systems for the automotive and manufacturing sectors. Its products are sold worldwide but are primarily in Canada.

The firm hired Mike Ashton in January of 2021 as vice president in charge of manufacturing operations. Mike had a bachelor’s degree in industrial engineering from Ryerson University and an MBA from Western University. He has a significant amount of experience in the manufacturing sector, and the CEO of RXL made it clear that operations needed to improve as the company revenues have stagnated over the past three years. At age 38, he established a good reputation for innovation, and revitalizing the manufacturing process should help product innovation.

Upon being hired, he began looking over the financial statements for 2020:

Mike has approached you for some insight into the company's financials.

Required:

1. Complete the following calculations: Return on equity, return on assets, capital asset turnover, current ratio, and debt to total assets (10 marks).
2. Do you think these calculations will help Mike drive the company forward? Explain why or why not. Your answer should be at least 500 words. Please include any citations/references you used in your answer.

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RXL Electronics Company Balance Sheet December 31, 2020 Assets Current assets.. $16,000,000 Capital assets Plant and equipment . Less: accumulated amortization Net plant and equipment.. Total assets $20,000,000 12,000,000 8,000,000 $24,000,000 Liabilities and Shareholders' Equity Current liabilities . 10,000,000 Long-term liabilities: Bonds payable 10.75%. Total liabilities. 2.000,000 $12,000,000 Shareholders' equity: Common stock, 2,000,000 shares. Retained earnings Total shareholders' equity. Total liabilities and shareholders' equity. $ 6,000,000 6.000,000 $12.000.000 $24,000,000 RXL Electronics Company Balance Sheet December 31, 2020 Assets Current assets.. $16,000,000 Capital assets Plant and equipment . Less: accumulated amortization Net plant and equipment.. Total assets $20,000,000 12,000,000 8,000,000 $24,000,000 Liabilities and Shareholders' Equity Current liabilities . 10,000,000 Long-term liabilities: Bonds payable 10.75%. Total liabilities. 2.000,000 $12,000,000 Shareholders' equity: Common stock, 2,000,000 shares. Retained earnings Total shareholders' equity. Total liabilities and shareholders' equity. $ 6,000,000 6.000,000 $12.000.000 $24,000,000

Answer rating: 100% (QA)

Answers Return On Equity 1508 Return on Assets 754 Capital Assets Turnover 375 Current Ratio 160 Debt to total Assets 050 Working notes and calculations Return on EquityNet IncomeShare holders Equity1... View the full answer