Q1 Consider the given income statement and balance sheet and calculate the following ratios :
- Return on Assets
- Return on Equity
- Debt Ratio
- Current Ratio
- Write your comment about each of the ratios calculated what it describes.
Following are the Financial Statements of CSU CORPORATION for the year ended Dec. 31, 2020
Assets : 2019
Cash $1400
Accounts Receivable 4000
Supplies 1800
Equipment 16000
Total Assets $23,200
Liabilities and Shareholders’ Equity :
Liabilities :
Notes Payable $5000
Accounts Payable 2000
Stockholders’ Equity :
Common Stock 10000
Retained Earnings 6200
$23,200
Income Statement
Revenues $10600
Expenses $5200
Supplies expenses 1500
Rent Expense 900
Insurance Expense 50
Interest Expense 50
Depreciation Expense 40 (7740)
Net Income $2860
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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