There was a bit of concern about one of RBL's newer entities - RBL Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. RBL Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: 200,000 Accounts Payable 300,000 Notes Payable 800,000 1,300,000 Total Current Liabilities Owners' Equity: 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 2,900,000 Total Owners' Equity Liabilities Sales Less: Cost of Goods Sold Retained Earnings RBL Paving Company Income Statement for Year Ending December 31, 2021 Dividends Addition to Retained Earnings Total Liabilities and Owners' Equity Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280.000) (522,000) 0 (522,000) 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000
There was a bit of concern about one of RBL's newer entities - RBL Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. RBL Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: 200,000 Accounts Payable 300,000 Notes Payable 800,000 1,300,000 Total Current Liabilities Owners' Equity: 2,200,000 Common Stock ($1 Par) 600,000 Capital Surplus 1,600,000 2,900,000 Total Owners' Equity Liabilities Sales Less: Cost of Goods Sold Retained Earnings RBL Paving Company Income Statement for Year Ending December 31, 2021 Dividends Addition to Retained Earnings Total Liabilities and Owners' Equity Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Less: Taxes Net Income 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280.000) (522,000) 0 (522,000) 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...
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Required: Evaluate the performance of RBL Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result.
a. Return on equity
b.Total assets turnover
c. Return on assets
d. Current ratio
e. Receivables turnover
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VIEWStep 3: Calculation of Total Assets Turnover & Interpretation
VIEWStep 4: Calculation of Return on Assets (ROA) & Interpretation
VIEWStep 5: Calculation of Current Ratio & Interpretation
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