Use the Following Information to Calculate the Liquidity and Profitability

question 18

Essay

Use the following information to calculate the liquidity and profitability ratios listed below.Round to two decimal places.
$$\begin{array} { l r l r } \text { Average stockholders' equity } & \$ 14,000 & \text { Net income } & \$ 2,100 \\\text { Average total assets } & 21,000 & \text { Net sales } & 17,500 \\\text { Current assets } & 15,000 & \text { Total liabilities } & 10,500 \\\text { Current liabilities } & 10,000 & &\end{array}$$ .
a. Current ratio
b. Working capital
c. Return on equity
d. Profit margin
e. Debt to equity
f. Return on assets
g. Asset turnover

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Definitions:

Conversion Costs

Expenses in manufacturing that include both labor costs and overhead costs associated with converting raw materials into finished goods.

Equivalent Units

A method used in process costing that converts partially completed units into a smaller number of fully completed units.

Molding Department

A specialized section within a manufacturing facility where the shaping or forming of materials into products takes place, often involving processes like injection molding or casting.

Work In Process

Refers to the goods that are in the manufacturing process but are not yet complete; it's an inventory account on the balance sheet.