A Summary Of Data From The Income Statements And Balance

A summary of data from the income statements and balance sheet for Roman Construction Supply Company for 2011 and 2010 appears below.

A summary of data from the income statements and balance

Total assets and owner’s equity at the beginning of 2010 were $680,000 and $420,000 respectively.

Required
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.

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