The financial information below was taken from the records of Lotechnic Enterprises. The company pays no dividends.

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The financial information below was taken from the records of Lotechnic Enterprises. The company pays no dividends.


The financial information below was taken from the records of


a. Compute the current ratio, the debt/equity ratio, and return on assets for each of the four years. Assume that the year-end balances in 2012 reflect the average balances during the year. Assume a tax rate of 30 percent.
b. Prepare a common-size balance sheet for each of the four years.
c. Use the statement of cash flows, and analyze the earning power and solvency positions ofLotechnic.

Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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