1)
Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.
Formula:
The ideal current ratio is 2:1
Debt ratio: Debt ratio is determined as total liabilities by total assets. It is used by the company to determine the debt amount that is used to finance assets of the company. When the ratio is higher than 50%, then the risk is higher.
Formula:
Earnings per share: Earnings per share help to measure the profitability of a company. Earnings per share are the amount of profit that is allocated to each share of outstanding stock.
Formula:
Compute of Company O’s current ratio, debt ratio and earnings per share.
To compute: Current ratio, debt ratio and earnings per share
2)
To compute: Current ratio, debt ratio, and earnings per share after evaluation of the following transactions:
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Horngren's Financial & Managerial Accounting, The Financial Chapters, Student Value Edition (5th Edition)
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