The Following Data Was Reported by JSB for a Two-Year

question 21

Essay

The following data was reported by JSB for a two-year period: Assets: Liabilities: *Includes interest expense, $2,500 (pre-tax)
(a)Compute the following ratios for 20x12:
(1)Receivable turnover
(2)Inventory turnover
(3)Creditors' equity to total assets
(4)Acid test ratio
(5)Return on owners' equity
(6)Profit margin on sales
(7)Current ratio
(8)Return on total assets
(9)Owners' equity to total assets
(10)Financial leverage
(b)Briefly explain and interpret financial leverage.

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Definitions:

Incentive Function

The role of incentives or rewards in influencing individuals' or entities' behavior towards achieving certain goals or outcomes.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied.

Land-Rent Taxes

Taxes imposed on the economic rent of land, aiming to capture the value generated by the inherent properties of the land itself without discouraging investment or development.

Economic Efficiency

A condition in which a market or an economy utilizes resources in a way that maximizes the production of goods and services.