Reference no: EM131824329

Problem - You are interested in investing in Copy Free Company, and you have obtained the balance sheets for the company for the past 2 years.

Copy Free Company Balance Sheet At June 30, 2009 and 2008

                                                                   2009             2008
Current assets:
Cash                                                         $ 195,000       $ 95,500
Accounts Receivable, net                               213,000          115,000
Inventory                                                     250,000          135,000
Prepaid rent                                                  13,000           15,000
Total current assets                                       671,000          360,500
Equipment, net                                              290,000          275,000
Total assets                                                $ 961,000       $ 635,500
Total current liabilities                                    305,000          225,000
Long-term liabilities                                        220,000          115,000
Total liabilities                                                525,000          340,000
Common stockholders' equity                          110,000          85,000
Retained earnings                                           326,000          210,500
Total liabilities and stockholders' equity          $ 961,000      $  635,500

The following amounts were reported on the income statement for the year ended June 30, 2009.

Sales                              $325,000
Cost of goods sold            220,000
Interest expense                9,000
Net income                       75,000

Required: Compute as many of the financial statement ratios you have studied as possible with the information provided for Copy Free Company. Some ratios can be computed for both years and others can be computed for only 1 year.