Chapter 11
Financial Statement Analysis
549
AP-3A (
3
)
All-You-Can-Buy Company reports current assets of $6,572, and current liabilities of $2,786.
Calculate the current ratio.
AP-4A (
3
)
Total current liabilities for Nicholson Restoration Company is $2,786. If cash is $2,000, short-
term investments are $3,000, long-term investments are $1,000 and accounts receivable is
$1,200, calculate the quick ratio.
AP-5A (
4
)
The income statement of Ellen Corporation for the years 2015 and 2016 showed the following
gross profit.
2016
2015
Sales Revenue
$97,200
$80,000
Cost of Goods Sold
72,000
50,000
Gross Profit
$25,200
$30,000
Required
a) Calculate the gross profit margins for both years.
