Question

Financial Information for Weston Co at December 31 Cash 105,000 1105,000 112,000 130,000 100,000 115,000 140,000...


Financial Information for Weston Co at December 31
Cash 105,000
1105,000
112,000
130,000
100,000
115,000
140,000
105,000
Accounts Receivable 112,000
Inventory 130,000
Equipment 100,000
Accounts Payable 115,000
Net Income for the year 140,000
Calculate Working Capital
Calculate Current Ratio
Calculate Quick Ratio
Calculate Rate Earned on Total Assets (ROA)

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Answer #1

Working capital = Current assets-Current liabilities

                         = 347000-115000

Working capital = 232000

Current ratio = Current assets/Current liabilities

                     = 347000/115000

Current ratio = 3.02:1

Quick ratio = 217000/115000 = 1.89:1

Rate earned on total assets = 140000*100/447000 = 31.32%

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