FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Smartlink Computer Services Co. specializes in customized software development for the broadcast and telecommunications industries. The company was started by three people to develop software primarily for a national network to be used in broadcasting national election results. After sustained and manageable growth for many years, the company has grown very fast over the last three years, doubling in size.
This growth has placed the company in a challenging financial position. Within thirty days, Smartlink will need to renew its P300,000 loan with Philippine National Bank. This loan is classified as a current liability on Smartlink’s
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Discuss (at least 4) briefly the limitations and difficulties that can be encountered in using ratio analysis.
Transcribed Image Text:Smartlink Computer Services Co.
Bolance Sheets
December 31
(in thousandi)
he Year
Lant rear
Aseh
P50
350
Accounh recelvoble. net.
Other curent oets
Equipment net
Beniture ond fistures. net
Other nonturent met
P50
250
140
800
100
1100
120
240
P1.30
200
P1S0
Total aet
Liabites ond stockholders'eauty
Accounts poyobie
Tarespoyotle
Note payable riippine Notional Bar)
Bondi payobie dveh seven yean
Total liablities
P150
140
P130
120
200
300
850
Copitalstock (1.000 thares
Retanedeing
Totol stockhoiders'equity
Totol liabilties ond stockholder eqvity
100
100
710
140
P1.30
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