JARROW COEPORATION COMMON SIZE BALANCE SHEET FOR 2007 AND 2008 ASSETS BALANCE Current Assets % Cash

Account receivables 0.1 Inventory +0.2 Total .0 Fixed Assets Net plant and equipment Total Assets 0% LIABILITIES AND OWNERS EQUITY Current Liabilities Account payable Note payable -0.2 Total -0.2 Long term debt 3.6 Owners equity Common stock and pay in surplus -0.6 Accumulated retained earnings -2.8 Total Total Liabilities and Owners equity 0% 72.8 100.0% 69.4 -3.4 100.0% 65.0 62.2 7.8 7.2 12.4 16.0 14.6 14.4 8.5 6.1 8.5 5.9 .0 80.4 100.0% 80.4 100.0% .0 19.6 19.6 10.9 11.1 2.9 5.8 2007 % 2.8 5.7 2008 % -1.1 -

JARROW CORPORATION COMMON BASE BALANCE SHEET FOR 2007 AND 2008

ASSETS Current Assets Cash Account receivables Inventory Total Fixed Assets Net plant and equipment Total Assets LIABILITIES AND OWNERS EQUITY Current Liabilities Account payable Note payable Total Long term debt Owners equity Common stock and pay in surplus Accumulated retained earnings Total Total Liabilities and Owners equity 2.1 1.1 4.3 1.0

C/B

1.1 1.1 3.2

1.1

1.0

1.4

1.0 1.0 2.0 5.5

Q2 No. This is because the preferred stock was used as working capital to finance the activities of the firm, and cannot be stated under total equity when preparing the financial position.

Q3 Current ratio = current assets/ current liabilities 46650000/3629000 = 1.29

Quick ratio = current asset inventory = 46650000 - 18880000 = 0.77 Current liabilities 36290000

Total debt ratio= total assets total equity = 341470000-201380000 = 0.41 Total assets Debt ratio = total debt / total equity 0.41/0.59 = 0.7 341470000

Equity multiplier = total assets / total equity = 341470000 / 201380000 = 1.7

Q4 Inventory ratio = inventory/ current liabilities 18880000 / 36290000 = 0.52 This means East Coast Yachts has $0.52 in inventory for every $1 in current liabilities