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Computing Ratios

A. Perform current ratio analysis: trolls incorporated had the following transactions involving current assets and current liabilities during Feb 2007.
Feb 3 collected accounts receivable of \$ 15000
Feb 7 purchased equipment for \$20,000 cash
Feb 11 paid \$ 3,000 for a 3-year insurance policy
Feb 14 Paid accounts payable of \$14,000
Feb 18 Declared cash dividends, \$ 6,000.
** As of Feb 1, 2007 current assets were \$100,000 and current liabilities were \$40,000.
Calculate the current ratio as of the beginning of the month and after each transaction.

B. Compute ratio for Barnes and noble.
2004 2003
Net sales 4,873.6 5,954.0
Cost of goods sold 3,386.6 4,323.8
Net income 143.3 151.9
Accounts receivable 1,274.6 1,526.1
Total assets 3,301.5 3,507.3
Total common stockholder equity 1,165.9 1,259.7

Calculate the ratios for 2004:
A. Profit margin
B. Asset turnover
C. Return on assets
D. Return in common stockholders equity
E. Gross profit rate.

Solution Summary

Using an Excel 97-2003 spreadsheet, this solution illustrates how to compute the following ratios:

A. Profit margin
B. Asset turnover
C. Return on assets
D. Return in common stockholders equity
E. Gross profit rate
F. Current ratio

\$2.19