Explore BrainMass

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?

    ---

    © BrainMass Inc. brainmass.com June 3, 2020, 6:21 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/analyzing-financial-statements-56829

    Attachments

    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

    ADVERTISEMENT