Morksen Corp has enjoyed modest success in penetrating

the personal #1071

Morksen Corp. has enjoyed modest success in penetrating the personal electronic devices
market since it began operations a few years ago. A new line of devices introduced recently has
been well received by customers. However, the company president, who is knowledgeable
about electronics but not accounting, is concerned about the future of the company. Although
the company has a line of credit with the local bank, it currently needs cash to continue
operations. The bank wants more information before it extends the company’s credit line. The
president has asked you, as the company’s chief accountant, to evaluate the company’s
performance by using appropriate financial statement analysis, and to recommend possible
courses of action for the company. In particular, the president wants to know how the company
can obtain additional cash. Summary financial statements for the past three years are available
below. Required: 1. Evaluate the company’s performance and its financial condition for the past
two years. Select six appropriate ratios to analyze the company’s profitability, liquidity, and
solvency for 2013 and 2014, and explain to the company’s president the meaning of each ratio
you calculate. 2. Based on your analysis of the ratios that you computed in (1), what
recommendation would you make to the president for obtaining additional cash?MORKSEN
CORP. Consolidated Statements of Financial PositionAt December 31
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Morksen Corp has enjoyed modest success in penetrating the personal

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