The condensed balance sheet of the Donovan Company is as follows on December 31, 2021.
Cash
Accounts Receivable
Merchandise Inventory
Plant Assets
Total Assets
30,000
30,000
80,000
180,000
320,000
Net Income for the year was $14,000.
INSTRUCTIONS:
Accounts Payable
6% Note Payable (due in 2030)
Common Stock 100 par
Retained Earnings
Total Equities
60,000
100,000
120,000
40,000
320.000
For each of the following ratios, indicate how it is computed, the computation, and its
significance.
1.
2.
3.
Current Ratio
Acid Test Ratio
Earnings per Share
4. Debt to Owners Equity
5.
Rate of Return on Owners Equity
6.
Rate of Return on Assets