Rollins products company has had poor operating results for

Reference no: EM13604147

Rollins Products Company has had poor operating results for the past two years. As the accountant for Rollins Products Company, you have the following information available to you:

Current assets $45,000 $35,000
Total assets 145,000 110,000
Current liabilities 20,000 10,000
Long-term liabilities 20,000 --
Owner's equity 105,000 100,000
Net sales 262,000 200,000
Net income 16,000 11,000

Total assets and owner's equity at beginning of 2010 were $90,000 and $80,000, respectively. The owner made no investments 2010 or 2011.

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

2. Computer the following measures of profitability for 2009 and 2010: (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

Reference no: EM13604147

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