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Big Apple, Inc: Calculate ROI, ROE,WC, Current Ratio

Presented below are the comparative balance sheets of Big Apple, Inc., at December 31, 2009, and 2008. Sales for the year ended December 31, 2009, totaled $890,000.

Assets 2009 2008
Cash $45,000 $49,000
Account receivable 134,000 106,000
Merchandise inventory 201,000 197,000

Total assets $380,000 $352,000
Land 66,000 60,000
Building and equipments 364,000 325,000
Less: Accumulate depreciation (186,000) (157,000)
Total assets $624,000 $580,000

Liabilities
Short-term debt $49,000 $43,000
Accounts payable 92,000 84,000
Other accrued liabilities 64,000 67,000
Total current liabilities $205,000 $194,000
Long term debt 87,000 107,000
Total liabilities $292,000 $301,000

Owners Equity
Common stock, no par, 100,000 shares
authorized, 35,000 and 28,000 shares
issued respectively $102,000 $78,000
Retained earnings:
Beginning balance 201,000 168,00
Net income for the year 74,000 67,000
Dividends for the year (45,000) (34,000)
Ending balance $230,000 $201,000
Total owner's equity $332,000 $279,000
Total liabilities and owners equity $624,000 $580,000

Required:

(a.) Calculate ROI for 2009.

(b.) Calculate ROE for 2009.

(c.) Calculate working capital at December 31, 2009.

(d.) Calculate the current ratio at December 31, 2009.

Solution Preview

a) ROI = Net Income / Average Total Assets = 74000/((580000+624000)/2) = ...

Solution Summary

The solution calculates ROI, ROE, working capital, current ratio for Big Apple Inc

$2.19