Rose Corporation Comparative Balance Sheets Assignment | Top Universities
The financial statements of Rose Corporation appear below:
Rose Corporation
Comparative Balance Sheets
December 31, 2018 – 19
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Assets 2019 2018
Cash $600,000 $ 1,200,000
Short-term investments 600,000 1,800,000
Accounts receivable (net) 1,200,000 900,000
Inventory 1,800,000 2,100,000
Property, plant and equipment (net) 7,800,000 9,000,000
Total assets $12,000,000 $15,000,000
Liabilities and stockholders' equity
Accounts payable $600,000 $ 900,000
Short-term notes payable 1,200,000 2,700,000
Bonds payable 2,400,000 4,800,000
Common stock 4,500,000 4,500,000
Retained earnings 3,300,000 2,100,000
Total liabilities and stockholders' equity $12,000,000 $15,000,000
Rose Corporation
Income Statement
For the Year Ended December 31, 2019
Net sales $12,000,000
Cost of goods sold 7,500,000
Gross profit 4,500,000
Expenses
Operating expenses $1,260,000
Interest expense 540,000
Total expenses 1,80,000
Income before income taxes 2,700,000
Income tax expense 810,000
Net income $ 1,890,000
Required:
(a) Using the financial statements, compute the following ratios for Rose Corporation for 2019. Show all computations.
1. Current ratio.
2. Acid-test ratio.
3. Accounts receivable turnover.
4. Inventory turnover.
5. Profit margin.
6. Return on assets.
7. Assets turnover.
8. Times interest earned.
9. Working capital.
10. Debt to assets ratio.
(b) Based on the ratios calculated in (a), discuss briefly the improvement or lack thereof in financial position and operating results from 2018 to 2019 of Rose Corporation. Get Accounting homework help today
