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Ratio Analysis
Transaction Ratio Effect
1Issued common stock for Cash Asset Turnover Ratio Decrease
2Declared Cash dividend Current Ratio Decrease
3Declared stock dividend Current Ratio None
4Borrowed cash by issuing Notes Payable Liabilities to Equity Ratio
5Paid Salaries Expense Inventory Turnover None
6Sold Equipment for Cash Receivables Turnover None
7Sold Merchandise on Account Quick Ratio Increase
8Puchased marketable securities for cash Quick Ratio None
9Paid current portion of long-term debt ROA Increase
10Gave sales Discount Profit Margin Decrease
b) Dividend paid for 2018 was $ 6875 & Dividend payout ratio for the year was 50%.
a) Net Income = 13750 & Net Sales = $ 100,000
13750 ❑
c) Return on assets of Paradise Ltd was 5% 0.05=
250000+ 𝑥
a) Total Asset for 2018 = $ 300,000 2
a) Asset Turnover
a) = 100000/275000 = 0.36
b) Change in NWC = (60000-42000) - (50000-35000) = 18000-15000 = 3000