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What I can do Activity 2: Direction: Use given the ratio compute the Financial Ratio Analysis. The comparative statement of financial position and statement of comprehensiv income of Entity A on December 31, 2020 are shown below: ABC Co. Statement of Financial Position As of December 31, 2020 ASSETS Cash and cash equivalents Accounts receivable Inventory Prepaid assets Total current assets 2020 440,000 130,000 120,000 40,000 730,000 2019 200,000 120,000 480,000 160,000 960,000 Property, plant & equipment Total noncurrent assets 760,000 760,000 440,000 440,000 TOTAL ASSETS 1,490,000 1,400,000 LIABILITIES Trade and other payables 620,000 560,000 EQUITY Owner's capital 870,000 840,000 TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 ABC Co. Statement of Comprehensive Income For the year ended December 31, 2020 Sales Cost of sales GROSS PROFIT 1,000,000 (600,000) 400,000 150,000 (240,000) (120,000) (30,000) (40,000 120,000 Rent income Depreciation expense Insurance expense Bad debts expense Loss on sale of equipment PROFIT FOR THE YEAR Other comprehensive income COMPREHENSIVE INCOME FOR THE YR. 120,000 10 Requirements: Compute for the following financial ratios for the year 2020: (round-off answers to two decimal places) a. Current ratio b. Quick (Acid-test) ratio c. Working capital d. Inventory turnover e. Days of inventory (use 365 days) f. Accounts receivable turnover (assume all sales are on credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio j. Debt-to-equity ratio k. Gross profit ratio I. Net profit ratio m. Return on assets.

What I can do Activity 2: Direction: Use given the ratio compute the Financial Ratio Analysis. The comparative statement of financial position and statement of comprehensiv income of Entity A on December 31, 2020 are shown below: ABC Co. Statement of Financial Position As of December 31, 2020 ASSETS Cash and cash equivalents Accounts receivable Inventory Prepaid assets Total current assets 2020 440,000 130,000 120,000 40,000 730,000 2019 200,000 120,000 480,000 160,000 960,000 Property, plant & equipment Total noncurrent assets 760,000 760,000 440,000 440,000 TOTAL ASSETS 1,490,000 1,400,000 LIABILITIES Trade and other payables 620,000 560,000 EQUITY Owner's capital 870,000 840,000 TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 ABC Co. Statement of Comprehensive Income For the year ended December 31, 2020 Sales Cost of sales GROSS PROFIT 1,000,000 (600,000) 400,000 150,000 (240,000) (120,000) (30,000) (40,000 120,000 Rent income Depreciation expense Insurance expense Bad debts expense Loss on sale of equipment PROFIT FOR THE YEAR Other comprehensive income COMPREHENSIVE INCOME FOR THE YR. 120,000 10 Requirements: Compute for the following financial ratios for the year 2020: (round-off answers to two decimal places) a. Current ratio b. Quick (Acid-test) ratio c. Working capital d. Inventory turnover e. Days of inventory (use 365 days) f. Accounts receivable turnover (assume all sales are on credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio j. Debt-to-equity ratio k. Gross profit ratio I. Net profit ratio m. Return on assets.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What I can do Activity 2: Direction: Use given the ratio compute the Financial Ratio Analysis. The comparative statement of financial position and statement of comprehensive income of Entity A on December 31, 2020 are shown below: АВС Со. Statement of Financial Position As of December 31, 2020 ASSETS Cash and cash equivalents 2020 440,000 130,000 120,000 40,000 730,000 2019 200,000 120,000 480,000 160.000 Accounts receivable Inventory Prepaid assets Total current assets 960,000 Property, plant & equipment Total noncurrent assets 760,000 760,000 440,000 440,000 TOTAL ASSETS 1,490,000 1,400,000 LIABILITIES Trade and other payables 620,000 560,000 EQUITY Owner's capital 870,000 840,000 TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 АВС Со. Statement of Comprehensive Income For the year ended December 31, 2020 Sales 1,000,000 (600,000) 400,000 150,000 (240,000) (120,000) (30,000) (40,000) 120,000 Cost of sales GROSS PROFIT Rent income Depreciation expense Insurance expense Bad debts expense Loss on sale of equipment PROFIT FOR THE YEAR Other comprehensive income COMPREHENSIVE INCOME FOR THE YR. 120,000 10 Requirements: Compute for the following financial ratios for the year 2020: (round-off answers to two decimal places) a. Current ratio b. Quick (Acid-test) ratio Working capital d. Inventory turnover e. Days of inventory (use 365 days) f. Accounts receivable turnover (assume all sales are on credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio j. Debt-to-equity ratio k. Gross profit ratio I. Net profit ratio m. Return on assets. n. Return on equity.
Transcribed Image Text:What I can do Activity 2: Direction: Use given the ratio compute the Financial Ratio Analysis. The comparative statement of financial position and statement of comprehensive income of Entity A on December 31, 2020 are shown below: АВС Со. Statement of Financial Position As of December 31, 2020 ASSETS Cash and cash equivalents 2020 440,000 130,000 120,000 40,000 730,000 2019 200,000 120,000 480,000 160.000 Accounts receivable Inventory Prepaid assets Total current assets 960,000 Property, plant & equipment Total noncurrent assets 760,000 760,000 440,000 440,000 TOTAL ASSETS 1,490,000 1,400,000 LIABILITIES Trade and other payables 620,000 560,000 EQUITY Owner's capital 870,000 840,000 TOTAL LIABILITIES & EQUITY 1,490,000 1,400,000 АВС Со. Statement of Comprehensive Income For the year ended December 31, 2020 Sales 1,000,000 (600,000) 400,000 150,000 (240,000) (120,000) (30,000) (40,000) 120,000 Cost of sales GROSS PROFIT Rent income Depreciation expense Insurance expense Bad debts expense Loss on sale of equipment PROFIT FOR THE YEAR Other comprehensive income COMPREHENSIVE INCOME FOR THE YR. 120,000 10 Requirements: Compute for the following financial ratios for the year 2020: (round-off answers to two decimal places) a. Current ratio b. Quick (Acid-test) ratio Working capital d. Inventory turnover e. Days of inventory (use 365 days) f. Accounts receivable turnover (assume all sales are on credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio j. Debt-to-equity ratio k. Gross profit ratio I. Net profit ratio m. Return on assets. n. Return on equity.
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