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In: Accounting

The following balance sheet information is provided for Mash co. for 2018 : Assets 64,000 Liabilities...

The following balance sheet information is provided for Mash co. for 2018 :

Assets	64,000
Liabilities & Equity
Accounts Payable	3,840
Salaries Payable	9,040
Bonds Payable (mature in yr 2022	10,100
common Equity	41,020
Total Liabilities & Equity	64,000

what is the company's debt to assets ratio (rounded)?
a. 6%
b. 20%
c. 36%
d. 279%

ACC earned $8,000 in profit on net sales of $37,200 it's gross margin was $23,500 and its earnings before interst and taxes was $13,150. ACC's net margin is:
a. 465.0 %
b. 63.2%
c. 35.3%
d. 21.5%

Select the correct Statement regarding vertical analysis:
a. vertical analysis of the income statement involves showing each line item on the income statement as a percentage of total revenue (sales)
b. vertical analysis of the balance sheet involves showing each line item on the balance sheet as a percentage of total assets.
c. Both a,b are correct.
d. Nethier q, b correct.

Which of the following liquidity ratios is a conservative variation of the current ratio?
a. Quick Ratio
b. Book Value per Share.
c. Inventory Turnover
d. Debt to assets

Expert Solution

Debt-to-asset Ratio

Debt-to-asset Ratio = (Total Liabilities / Total Assets) x 100

Total Liabilities = Total Liabilities & Equity - Common Equity

= $64,000 - $41,020

= $22,980

Therefore, the Debt-to-asset Ratio = (Total Liabilities / Total Assets) x 100

= ($22,980 / $64,000) x 100

= 36%

“The Debt-to-asset Ratio = 36%”

Net Margin

Net Profit Margin = (Net Profit Sales) x 100

= ($8,000 / $37,200) x 100

= 21.5%

“The Net Margin = 21.5%”

Correct Statement regarding vertical analysis

The answer choice is “c. Both a,b are correct.

vertical analysis of the income statement involves showing each line item on the income statement as a percentage of total revenue and the vertical analysis of the balance sheet involves showing each line item on the balance sheet as a percentage of total assets.

Quick Ratio will have conservative variation of the current ratio

The answer choice is “a. Quick Ratio”

The Quick Ratio will have more conservative variation of the Current Ratio, since it does not consider the Inventory.

ekkarill92 answered 8 months ago

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