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3 years ago

Sprague Company has been operating for several years, and on December 31, 207, presented the following balance sheet.

Business

1 answer:

Firdavs [7]3 years ago

4 0

Answer:

A. Current Ratio= 2.63

B. Acid-Test Ratio = 1.44

C. Debt to Assets Ratio 51.16%

D. Return on assets 5.81%

Explanation:

a. Calculation forn Current Ratio

First step is to Calculate the Total Current Assets

Cash 40,000

Receivables 75,000

Inventory 95,000

Total Current Assets 210,000

Now let calculate Current Ratio

Current Ratio= Current Assets / Current Liabilities

Current Ratio=210,000/80,000

Current Ratio= 2.63

b Calculation for Acid-Test Ratio

Acid-Test Ratio=(Current Assets - Inventory) / Current Liabilities

Acid-Test Ratio =(210,000-95,000)/80,000

Acid-Test Ratio =115,000/80,000

Acid-Test Ratio = 1.44

c. Calculation for Debt to Assets Ratio

First step is to calculate total Debt

Accounts payable 80,000

Mortgage payable 140,000

Total Debt 220,000

Now let calculate the Debt to Assets Ratio

Debt to Assets Ratio= Total Debt/ Total Assets

Debt to Assets Ratio=220,000/430,000

Debt to Assets Ratio= 51.16%

d. Calculation for Return on assets

Return on assets= Net Income/ Average Assets

Return on assets=25,000/430,000

Return on assets 5.81%

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Answer:

The company's price–earnings ratio is 36.

Explanation:

Price earning ratio is the ratio of market value of share to earning per share. It shows that how much investors are willing to pay for each dollar of earning of the company.

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0.04 = Net Income / $7800

Net Income = $7800 x 0.04 = $312

Earning Per share = Net Income / number of outstanding shares

Earning Per share = $312 / 6,100 = $0.05

Price earning ratio = Market price of share / Earning per share

Price earning ratio = $1.8 / $0.05 = 36

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2 years ago

The number of businesses owned by hispanics and asians has:

Lina20 [59]

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4 years ago

Why do businesses take financial cost into account other than social cost when making decisions.

deff fn [24]

The correct answer to this open question is the following.

Although there are no options attached we can say the following.

Why do businesses take financial costs into account other than social costs when making decisions.?

The reason why is because businesses are created to make profits. And financial costs directly impact sales, revenue, and profits. Any other consideration that does not directly affect the balance sheet or the bottom line, is not considered a priority and takes the back seat when business decisions are made.

On the other hand, the social cost should be important and it is, but not as important as the financial costs for the above-mentioned reasons.

Social costs are more on the side of the ethics of the managers or leaders of the organizations. And ethics and moral values are not a prominent thing to be considered in the decision-making process of modern corporations.

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3 years ago

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Explanation:see attached file

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3 years ago