Selected Risk Ratios Are Presented for 2011 and 2010 for Techtron

question 31

Essay

Selected risk ratios are presented for 2011 and 2010 for Techtron Company.Also,refer to the financial statement data for the company.

Financial Statements



Required:a.Calculate the amounts of these ratios for 2012.
b.Assess the changes in the short-term liquidity risk of Techtron between 2010 and
2012 and the level of that risk at the end of 2012.
c.Assess the changes in the long-term solvency risk of Techtron between 2010 and
2012 and the level of that risk at the end of 2012.

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Definitions:

Trial Balance

A financial spreadsheet where all ledger balances are gathered into columns for debits and credits, ensuring both totals match.

Debit Column

The left-hand side of a ledger account, recording increases in assets and expenses, and decreases in liabilities, equity, and revenue.

Expense Recognition Principle

An accounting principle that dictates expenses should be recognized in the period in which they are incurred to earn revenues.

Efforts

The use of physical or mental energy to achieve tasks and goals.