Financial Accounting

771 Words2 Pages
bulb-icon

Recommended: The application of the balance sheet

Just Data

2-1.A. Given: A=$95,000; L=$40,000

OE = 95,000 - $40,000

OE = $55,000

2-1 B. Given: A = $65,000; OE = $40,000

L = $65,000 - $40,000

L = $25,000

2-1 C. Given: Current Assets = $25,000; L = $40,000; OE = $55,000

Non-Current Assets = $95,000 - $25,000

Non-Current Assets = $70,000

2-1 D. Given: Current Ratio = 2.2:1; Current Asset = $33,000, Non-current Asset = $55,000; Liabilities = $15,000

Current Liabilities = Current Assets / Ratio

Current Liabilities = $33,000/2.2

Current Liabilities = $15,000

OE = Total Assets - Total Liabilities

OE = $88,000 - $15,000

OE = $73,000

2-1 E. Given: Non-current Assets = $60,000; Total Assets = $95,000; Current Assets = $35,000; OE = $70,000

Current Liabilities = $95,000 - $70,000

Current Liabilities = $25,000

Current Ratio = $35,000 / $25,000

Current Ratio = 1.4:1

2-2

|J.L. Gregory Company |

|Balance Sheet As of |

|June 30 |

Show More
Related

  • Bestcare Health Maintenance Organization Net Working Capital

    579 Words  | 2 Pages

    Net working capital represents organization’s operating liquidity. In order to compute the net working capital, total current assets are divided from total current liabilities. When there is sufficient excess of current assets over current liabilities, an organization might be considered sufficiently liquid. Another ratio that helps in assessing the operating liquidity of as company is a current ratio. The ratio is calculated by dividing the total current assets over total current liabilities. When the current ratio is high, the organization has enough of current assets to pay for the liabilities. Yet, another mean of calculating the organization’s debt-paying ability is the debt ratio. To calculate the ratio, total liabilities are divided by total assets. The computation gives information on what proportion of organization’s assets is financed by a debt, and what is the entity’s ability to pay for current and long term liabilities. Lower debt ratio is better, because the low liabilities require low debt payments. To be able to lend money, an organization’s current ratio has to fall above a certain level, also the debt ratio cannot rise above a certain threshold. Otherwise, the entity will not be able to lend money or will have to pay high penalties. The following steps can be undertaken by a company to keep the debt ratio within normal

    Read More

  • Financial Analysis Of The Financial Position Of British Petroleum

    1748 Words  | 4 Pages

    This ratio helps in analysing the position of the company to satisfy its short term debts within a period of one year. The higher the current ratio would be the more the company will be in position to satisfy its short term debts.

    Read More

  • Analysis Of Home Depot

    1039 Words  | 3 Pages

    The Current Ratio is calculated by taking the current debt and dividing it by the current liabilities. It is the measurement on how a company can meet its short term liabilities with liquid assets (Loth, Rihar, 2015a).A higher ratio indicates favorable activity. A company should be able to meet it responsibilities with its

    Read More

  • Business Case Study: Charles Chocolate's Chocolate Company

    1009 Words  | 3 Pages

    Current ratio: This number is found by dividing the current assets by the current liabilities that is found on the balance sheet. The current ratio for 2010 was .666. This was calculated by $1550,631 / $2,326,966. The current ratio for 2011 was .905. This number was calculated by $1,543,816 / $1,705,132.

    Read More

  • Microsoft Corporation (MSFT) Finance Paper

    1244 Words  | 3 Pages

    Current Ratio – For the last three years was growing from 3.56 in 2001 to 3.81 in 2002 to 4.22 in 2003. The reason of grow is increased in Assets. Even though Liability was growing, Asset grow was more significant.

    Read More

  • FINANCIAL MANAGEMENT

    1058 Words  | 3 Pages

    What do you understand by the phrase “stakeholder analysis”? Attempt a stakeholder analysis of an organisation that you are closely associated with.

    Read More

  • Financial Analysis Of Rolls-Royce's Financial Ratio Analysis

    1377 Words  | 3 Pages

    By taking into account only the most liquid assets, ratio 1.0 in 2013 and 2012, which increased by a small margin 0.2 from 2011, indicates that company has strong liquidity position.

    Read More

  • Ratio Analysis Of Starbucks

    1252 Words  | 3 Pages

    In regards to the corporation’s balance sheet, it is necessary to place an importance on liquidity ratios to demonstrate the company’s ability to pay its short term obligations such as accounts payable and notes that have a duration of less than one year. These commonly used liquidity ratios include the current ratio, quick ratio, and cash ratio. All three ratios are used to measure the liquidity of a company or business. The current ratio is used to indicate a business’s ability to meet maturing obligations. The quick ratio is used to indicate the company’s ability to pay off debt. Finally the cash ratio is used to measure the amount of capital as well short term counterparts a business has over its current liabilities.

    Read More

  • Financial Analysis of Three Supermarket Chains

    966 Words  | 2 Pages

    ...To check how successful it has been, we calculate debtor collection period ratio. (Dyson, 2004) Fixed Asset turnover: In this ratio, we seek the amount of sales that can be generated (or the amount of fixed assets necessary to achieve a level of sales) from a given level of fixed assets. (Klein, 1998) Total asset turnover: This ratio determines that how efficiently a firm is utilizing its assets. If the asset turnover ratio is high, the firm is using its assets effectively in generating sales. If this ratio is low, the firm may not be using its assets efficiently and shall either increase sales or eliminate some of the existing assets. (Argenti, 2002) Solvency Ratio Gearing: Gearing reflects the relationship between a company’s equity capital (ordinary shares and reserves) and its other form of long-term funding (preference share, debenture, etc.) (Black, 2000)

    Read More

  • Leverage In Finance Essay

    835 Words  | 2 Pages

    There are two Companies P and R with similar type of business operations. Company P financed all operations by equity and Company R used equity and debt of 50 % each. The other parameters are :

    Read More

  • Financial Ratios, Discriminant Analysis and the Prediction of Corporate BankruptcyANKRUPTCY – ARTICLE SUMMARY

    872 Words  | 2 Pages

    Ratios traditionally measure the most important factors such as liquidity, solvency and profitability, as well as other measures of solvency. Different studies have found various ratios to be the most efficient indicators of solvency. Studies of ratio analysis began in the 1930’s, with several studies of the concluding that firms with the potential to file bankruptcy all exhibited different ratios than those companies that were financially sound. Among the study’s findings were that the deciding factor of the predictor of bankruptcy should not be only a few ratios, as the measure of a company’s financial solvency may differ as the firm’s situations differ. The important question is to which ratios are to be used and of those ratios chosen, which ratios are given priority weight.

    Read More

  • Financial Accounting Case Study: ABC Ltd 30

    1386 Words  | 3 Pages

    ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000

    Read More

  • Martin Manufacturing Company Historical Ratios

    598 Words  | 2 Pages

    The current ratio and quick ratios for the year 2003 are at 2.5 and 1.3, which are both higher than the industry average. The company has enough to cover short term bills and expenses. Both the current and quick ratios are showing an upward trend compared to 2001 and 2002. The current assets decreased by $ 20,264 to $ 1,531,181 and the current liabilities also decreased considerably by $255,402 to $616,000, a 29.3% decline, thus making the current ratio jump to a 2.5. The biggest decline was seen is accounts payable which decreased by $170,500 to $230,000, a decline of 42.6 %.

    Read More

  • Accounting: Accounting And Accounting

    841 Words  | 2 Pages

    The revenue/cost period-: Revenue and the cost period in accounting that the company get income from normal business activities. It’s referred to normal business income that the company got by selling their product and service.

    Read More

  • O Reilly Auto Parts: Long-Term Solvency Ratio

    1833 Words  | 4 Pages

    This is calculated by taking the total liabilities and dividing it by the stockholder’s equity, as a result it directly marks the risk that the company defaults on the repayment of its liabilities. Advance Auto Parts has a debt to equity ratio was declining at the start of the period, except for 2014 when took a long-term

    Read More

More about Financial Accounting

Open Document