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What is your assessment of the company solvency

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Reference no: EM132768178

Question: Diana's Doggy Daycare reports the following data in its October 31, 2020 financial statements:

• Current assets $30,000

• Long-term assets $125,500

• Current liabilities $45,000

• Long-term liabilities $49,000

• Gross sales $300,000

• Net income $5,000

1. What is your assessment of the company's solvency applying the current ratio? Why?

2. What is your assessment of company's solvency applying the debt-to-equity ratio? Why?

3. What is your assessment of the company's profitability applying the return on sales ratio? The industry average is 7%. Why?

4. What is your assessment of the company's profitability applying the return on owner's equity ratio. The industry average is 12%. Why?

Reference no: EM132768178

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