Explore BrainMass

# Analyzing Financial statements

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Need help on the follow problems in the attached file.

---

What is the return on assets ratio for 2006?

What is the current ratio for 2006?

What are the accounts receivable turn over for 2006?

What is the inventory turnover for 2006 (how many times?)

What is the long-term debt to assets for 2006?

---

#### Solution Preview

2006 2005
Accounts Receivable \$267,500 \$230,000
Inventory \$312,500 \$257,500
Total Current Assets \$670,000 \$565,000
Intangible Assets \$50,000 \$60,000
Total assets \$825,000 \$695,000
Current Liabilties \$77,500 \$75,000
Sales \$1,640,000
Cost of goods sold \$982,500
Interest expense \$10,000
Income tax expense \$77,500
Net Income \$127,500
Cash Flow from operations \$71,000
Cash Flow from investing activities \$(6,000)
Cash flow from financing activities 30%

What is the return on assets ratio for 2006?

Net Income / Total Assets = 127,500 / 825,000 = 0.15

A useful indicator of how profitable a company is relative to its total assets. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".

ROA tells you what earnings were generated from invested capital (assets). ROA for public companies can vary substantially, depending on the ...

#### Solution Summary

The expert analyzes financial statements for the return on asset ratios.

\$2.19