Given below is AU Chiefs Company’s financial statements. Compute for the financial rations and showthe solutions in a sheet of paper.1. Expenses to sale ratio2. Return on assets3. Return on Equity4. Asset Turnover ratio 20202019Cash122,500104,700Accounts Receivable90,65080,550Inventory66,20053,000Prepaid Expense85,450106,000Total Current Assets364,800344,250Property, Plant and Equipment925,000786,350TOTAL ASSETS1,654,6001,475,350 Total Current Liability381,500423,350Long-term Liabilities359,900230,600Mabini, Capital913,200821,400Total Liability and Equity1,654,6001,475,350 Sales1,047,0501,151,755Cost of Sales322,750355,025Gross Profit724,300796,730Selling Expenses353,250388,575Administrative Expenses128,150140,965Operating Income242,900267,190Interest Income10,50011,550Net Income232,400255,640Interpret the results of your computation for the following rations:Expenses to ratio -Return on assets -Return on Equity -Asset turnover ratio -

Lets understand the basics. Expense to sales ratio indicates how much expense is there in compare to…

Answered: Given below is AU Chiefs Company’s…

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 4CE

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Given below is AU Chiefs Company’s financial statements. Compute for the financial rations and show
the solutions in a sheet of paper.
1. Expenses to sale ratio
2. Return on assets
3. Return on Equity
4. Asset Turnover ratio

	2020	2019
Cash	122,500	104,700
Accounts Receivable	90,650	80,550
Inventory	66,200	53,000
Prepaid Expense	85,450	106,000
Total Current Assets	364,800	344,250
Property, Plant and Equipment	925,000	786,350
TOTAL ASSETS	1,654,600	1,475,350

Total Current Liability	381,500	423,350
Long-term Liabilities	359,900	230,600
Mabini, Capital	913,200	821,400
Total Liability and Equity	1,654,600	1,475,350

Sales	1,047,050	1,151,755
Cost of Sales	322,750	355,025
Gross Profit	724,300	796,730
Selling Expenses	353,250	388,575
Administrative Expenses	128,150	140,965
Operating Income	242,900	267,190
Interest Income	10,500	11,550
Net Income	232,400	255,640