Business application- A company's simplified balance sheet and income state- ment follow.
| Balance Sheet December 31, 2014 |
| Assets |
|
|
Liabilities |
|
|
Current assets
|
$ 50,000
|
Current liabilities
|
|
$ 20,000
|
|
Investments
|
10,000
|
Long-term liabilities
|
|
30,000
|
|
Property, plant, and equipment
|
146,500
|
Total liabilities
|
|
$ 50,000
|
|
Intangible assets
|
13,500
|
Stockholders' equity
|
|
|
|
|
|
Stockholders' equity
|
|
170,000
|
|
Total assets
|
$220,000
|
Total liabilities and stockholders' equity
|
|
$220,000
|
|
Income Statement
For the Year ended December 31, 2014
|
|
Net sales
|
$410,000
|
|
Cost of goods sold
|
250,000
|
|
Gross margin
|
$160,000
|
|
Operating expenses
|
135,000
|
|
Net income
|
$ 25,000
|
Total assets and stockholders' equity at the beginning of 2014 were $180,000 and $140,000, respectively.
1. Compute the following liquidity measures: (a) working capital and (b) current ratio. (Round to one decimal place.)
2. Compute the following profitability measures: (a) profit margin, (b) asset turnover, (c) return on assets, (d) debt to equity ratio, and (e) return on equity. (Round to one decimal place.)