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    Circuit City: Evaluate Profitability, Liquidity by viewing financial statements

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    17. A recent annual report issued by Circuit City revealed the attached data.

    The Company's income statement reported total annual revenue of $12.96 billion, and net income for the year of $161 million.


    a. Evaluate Circuit City's profitability by computing its net income percentage and it return on equity for the year.
    b. Evaluate Circuit City's liquidity by computing its working capital and its current ratio at the beginning of the year and at the end of the year.

    c. Does Circuit City appear to be both profitable and liquid? Explain.

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    See the attached file.

    17. A recent annual report issued by Circuit City revealed the following data:

    End of Beginning of the
    Year Year
    Current Assets 2.85 Billion 2.94 Billion
    Current Liabilities 1.29 Billion 1.41 Billion
    Stockholders equity 2.36 billion 2.14 Billion

    The Company's income statement ...

    Solution Summary

    The solution demonstrates the analysis of Circuit City with good explanations.