Reference no: EM132597618

Question - A summary of data from the income statement and balance sheets for Roman Constructions Supply Company for 2011 and 2010 appears below.

	2011	2010
Current assets	$183,000	$155,000
Total assets	1,160,000	870,000
Current liabilities	90,000	60,000
Long-term liabilities	400,000	290,000
Owner's equity	670,000	520,000
Net sales	2,300,000	1,740,000
Net income	150,000	102,000

Total assets owner's equity at the beginning of 2010 were $680,000 and $420,000, respectively.

Required -

1. Compute the following liquidity measures for 2010 and 2011: (a) working capital and (b) current ratio. Comment on the differences between the years.

2. Compute the following measures of profitability for 2010 and 2011: (a) profit margin, (b) asset turnover, (c) return on assets, (d) debt to equity ratio, and (e) return on equity. Comment on the change in performance from 2010 to 2011.