Question

1) From Adobe System Incorporation 10K form, Locate the company's balance sheet. Give the company's accounting equation at the end of the most recent year and at the end of the prior year?

https://wwwimages2.adobe.com/content/dam/acom/en/investor-relations/pdfs/ADBE-10K-FY17-FINAL-CERTIFIED.pdf

Recent year: ______=______+_____

Prior Year: _______=_______+______

2) Calculate the company's current ratio for both most recent year and prior year?

2) b. Explain what the information provides and what the results mean?

3) Calculate the company's debt to total ratio for both most recent year and prior year?

3)b. Explain what the information provides and what the results mean?

4) Calculate the company's Profit Margin (%) ratio for both most recent year and prior year?

4.b.Explain what the information provides and what the results mean?

5) Calculate the company's return on assets ratio for both most recent year and prior year?

5.b Explain what the information provides and what the results mean?

Answer 1

Ans.1). Accounting Equation

Recent Year(2017)

Capital = Assets - Liabilities or

Assets = Capital + liabilities

14535556 = 8459869 + 6075687

14535556 = 14535556

Prior year(2016)

Assets = Capital + liabilities

12697246 = 7424835 + 5272411

12697246 = 12697246

Ans.2 a) Calculate Company's current ratio

Recent year(2017)

current ratio = total assets/total liabilities

=14535556 / 6075687 = 2.39

Previous year(2016)

= 12697246 / 5272411 = 2.41

Ans. 2 b) Company's balance sheet includes information related with companies assets, liabilities and capital of company. Assets are properties of company which are cash, cash in hand, accounts receivable, goodwill of company, short term investments and other tangible or intangible assets. Liabilities are amounts which are due for company to pay its creditors, bills payable ,short- term and long term loans and obligations to pay.Balance sheet trade liabilities, income tax , accrued expenses, debt, etc. Deffered revenue is a revenue which is received by company in advance and Deffer in come tax is paid by company in advance. on the hand side balance sheet shows about capital invested in business by equity and preference shares issued by company. Company's earnings from shares paid up by shareholders and company's Profit.

Result indicates about financial position of company. Company has more assets than its laibilities , company generated profits in case of both of years. company also has deffered revenues from both of years. So financial condition of company is good and it is a profit generated organisation.

Ans.3 a) Calculate Company's debt to total ratio

Recent year(2017)

Debt Ratio = Total Liabilities/ Total Assets

= 6075687 / 14535556 = 0.417

Previous year(2016)

= 5272411 / 12697246 = 0.415

Ans. 3 b) - Information provided for calculate debt ratio is total of liabilities over total assets. Debt ratio results determine percentage of creditors money invested in company.

Ans. 4 a) Company's Profit Margin (%) Ratio

Recent Year(2017)

Company's Profit margin Percentage ratio = Net Income / Total revenue

Profit margin percentage ratio = 1693954 / 7301505 = 0.232

Previous year(2016)

Profit margin percentage ratio =1168782 / 5854430 = 0.1996 = 0.20(appr.)

Previous year(2015)

Profit margin percentage ratio = 629551 / 4795511 = 0.131

Ans.4b) - Information provided for calculate profit margin percentage ratio is net income over total revenue generated through sales. Result obtained from profit margin percentage ratio is used for calculation of sales contributions to the total earnings of company.

Ans. 5 a) Calculate Company's return on assets ratio

Recent year(2017)

Return on assets ratio = Net income /total Assets

= 1693954/ 14535556 = 0.117

Previous year(2016)

= 1168782/ 12697246 = 0.092

Ans. 5b) - Information used for calculate is net income over its total assets. This ratio calculate for determine percentage of profit with use of company's assets,.