A summary of data from the income statements and balance sheet for Roman Construction Supply Company for 2011 and 2010 appears below.
Total assets and ownerâs equity at the beginning of 2010 were $680,000 and $420,000 respectively.
1. Compute the following liquidity measures for 2010 and 2011:
(a) Working capital and
(b) Current ratio. Comment on the differences between the years.
2. Compute the following measures of profitability for 2010 and 2011:
(a) Profit margin,
(b) Asset turnover,
(c) Return on assets,
(d) Debt to equity ratio, and
(e) Return on equity. Comment on the change in performance from 2010 to2011.