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Discuss villegass profitability and liquidity

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Reference no: EM13884702

Liquidity and Profitability Ratios

Business Application- Villegas Company is considering applying for a bank loan. Various data from Villegas's classified financial statements follow.

 

2014

2013

Current assets

$100,000

$  85,000

Total assets

440,000

355,000

Current liabilities

45,000

25,000

Long-term liabilities

75,000

25,000

Owner's equity

320,000

305,000

Sales

600,000

525,000

Net income

30,000

40,000

Its total assets and owner's equity at the beginning of 2013 were $345,000 and $295,000, respectively.

1. Use (a) liquidity analysis and (b) profitability analysis to document Villegas's financial position. (Round to two decimal places.)

2. Discuss Villegas's profitability and liquidity. Do you think it will qualify for a bank loan?

Reference no: EM13884702

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