FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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1 AP12-14B (Analysis using selected ratios)
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3 The UCW Furniture Inc. operates several stores selling pine furniture. Selected financial ratios are as follows:
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16 In 2022, UCW Furniture Inc decided to change its strategy from selling high-end furniture to selling lower-cost items in order to be more competitive
17 and began importing low-cost furniture. In order to do this the company invested in new warehouse facilities and its total assets grew from
18 $2.5 million in 2022 to $4.5 million in 2023 and finally to $5 million in 2024.
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20 Required
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a) Briefly discuss what these financial ratios indicate about how UCW Furniture Inc was affected by its decision to change its strategy in 2022.
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b) Which measures have deteriorated during the subsequent periods?
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c) Which ratios indicate positive action taken by UCW Furniture Inc during the subsequent periods?
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