The financial statements of Star Corporation appear below: Assets Cash Short-term investments Accounts receivable (net) Star...

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The financial statements of Star Corporation appear below: Assets Cash Short-term investments Accounts receivable (net) Star Corporation Comparative Balance Sheets December 31, 2018-19 Inventory Property, plant and equipment (net) Total assets Liabilities and stockholders' equity Accounts payable Short-term notes payable Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity $ 50,000 50,000 2019 100,000 150,000 650.000 $1.000.000 $ 50,000 100,000 200,000 375,000 275.000 $1.000.000 150,000 $ 100,000 Star Corporation Income Statement For the Year Ended December 31, 2019 175,000 2018 75,000 750,000 $1.250.000 $75,000 225,000 400,000 375,000 175.000 $1.250.000 Net sales Cost of goods sold Gross profit Expenses Operating expenses Interest expense Total expenses Income before income taxes Income tax expense Net income 1. Current ratio. 2. Acid-test ratio. 3. Accounts receivable turnover. 4. Inventory turnover. 5. Profit margin. 6. Return on assets. $105,000 45.000 Required: (a) Using the financial statements, compute the following ratios for Star Corporation for 2019. Show all computations. (4 marks) 7. Assets turnover. 8. Times interest earned. 9. Working capital. 10. Debt to assets ratio. $1,000,000 625.000 375.000 150.000 225,000 67.500 $.157.500 (b) Prepare a vertical analysis of the 2019 income statement data for Star Corporation. (2 marks) (c) Based on the ratios calculated in (a), and the vertical analysis in (b), discuss briefly the improvement or lack thereof in financial position and operating results from 2018 to 2019 of Star Corporation. (2 marks) The financial statements of Star Corporation appear below: Assets Cash Short-term investments Accounts receivable (net) Star Corporation Comparative Balance Sheets December 31, 2018-19 Inventory Property, plant and equipment (net) Total assets Liabilities and stockholders' equity Accounts payable Short-term notes payable Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity $ 50,000 50,000 2019 100,000 150,000 650.000 $1.000.000 $ 50,000 100,000 200,000 375,000 275.000 $1.000.000 150,000 $ 100,000 Star Corporation Income Statement For the Year Ended December 31, 2019 175,000 2018 75,000 750,000 $1.250.000 $75,000 225,000 400,000 375,000 175.000 $1.250.000 Net sales Cost of goods sold Gross profit Expenses Operating expenses Interest expense Total expenses Income before income taxes Income tax expense Net income 1. Current ratio. 2. Acid-test ratio. 3. Accounts receivable turnover. 4. Inventory turnover. 5. Profit margin. 6. Return on assets. $105,000 45.000 Required: (a) Using the financial statements, compute the following ratios for Star Corporation for 2019. Show all computations. (4 marks) 7. Assets turnover. 8. Times interest earned. 9. Working capital. 10. Debt to assets ratio. $1,000,000 625.000 375.000 150.000 225,000 67.500 $.157.500 (b) Prepare a vertical analysis of the 2019 income statement data for Star Corporation. (2 marks) (c) Based on the ratios calculated in (a), and the vertical analysis in (b), discuss briefly the improvement or lack thereof in financial position and operating results from 2018 to 2019 of Star Corporation. (2 marks)

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