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There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: Accounts Payable 200,000 300,000 Notes Payable 800,000 1,300,000 Less: Taxes Net Income 2,200,000 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Current Liabilities Owners' Equity: Common Stock ($1 Par) Dividends Addition to Retained Earnings Liabilities Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Total Owners' Equity Total Liabilities and Owners' Equity 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) (522,000) 0 Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000

There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: Accounts Payable 200,000 300,000 Notes Payable 800,000 1,300,000 Less: Taxes Net Income 2,200,000 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Current Liabilities Owners' Equity: Common Stock ($1 Par) Dividends Addition to Retained Earnings Liabilities Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and Taxes Less: Interest Expense Taxable Income Total Owners' Equity Total Liabilities and Owners' Equity 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) (522,000) 0 Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....
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a. Return on equity b. Total assets turnover c. Return on assets d. Current ratio e. Receivables turnover
There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets 200,000 300,000 800,000 1,300,000 Current Liabilities: Accounts Payable Notes Payable Less: Taxes Net Income 2,200,000 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Current Liabilities Owners' Equity: Common Stock ($1 Par) Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Dividends Addition to Retained Earnings Liabilities Total Owners' Equity Total Liabilities and Owners' Equity Earnings Before Interest and Taxes Less: Interest Expense Taxable Income 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) 0 (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result. 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000
Transcribed Image Text:There was a bit of concern about one of Big Rock's newer entities - Big Rock Paving Company. Management wants you to review the two financial statements below and give your analysis of the company's performance. Big Rock Paving Company Current Assets: Cash Assets Accounts Receivable Inventory Total Current Assets Fixed Assets: Property, Plant & Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets 200,000 300,000 800,000 1,300,000 Current Liabilities: Accounts Payable Notes Payable Less: Taxes Net Income 2,200,000 600,000 Capital Surplus 1,600,000 Retained Earnings 2,900,000 Total Current Liabilities Owners' Equity: Common Stock ($1 Par) Big Rock Paving Company Income Statement for Year Ending December 31, 2021 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Dividends Addition to Retained Earnings Liabilities Total Owners' Equity Total Liabilities and Owners' Equity Earnings Before Interest and Taxes Less: Interest Expense Taxable Income 3,400,000 2,700,000 700,000 682,000 (682,000) 120,000 (802,000) (280,000) (522,000) 0 (522,000) Required: Evaluate the performance of Big Rock Paving Company using the below ratios. Define each ratio, perform the calculation, and provide an explanation of the result. 700,000 600,000 1,300,000 600,000 100,000 100,000 800,000 2,900,000
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