Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 2, Problem 2.5BE
(a)
To determine
Formula of current ratio:
To determine: (a) Current ratio.
(b)
To determine
Debt to assets ratio: This financial ratio evaluates the ability of a company to pay off long-term debt obligations owed to creditors. This ratio assesses the solvency of a company.
Formula of debt to assets ratio:
To determine: (b) Debt to assets ratio
(c)
To determine
Formula of free cash flow:
To determine: (c) Free cash flow.
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You are given the following information about Sheridan Plumbing Company. Revenues in 2017 totaled $ 908, depreciation expenses $ 77, costs of goods sold $ 374, and interest expenses $ 71. At the end of the year, current assets were $ 136 and current liabilities were $ 117. The company has an average tax rate of 34 percent. Calculate its net income by setting up an income statement. (Round answers to 2 decimal places, e.g. 15.25)
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Accountants for Johnson, Inc. have assembled the following data for the year ended December 31, 2018:
2018 2017
Current Assets
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Accounts Receivable 64,500 69,400
Merchandise Inventory 82,000 79,000
Current Liabilities
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Transaction Data for 2018:
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Chapter 2 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
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