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The document provides comparative balance sheet data for Roadway Corporation and Rondo Corporation for the years 2015 and 2016. It includes assets, liabilities, and equity amounts. It also provides instructions to analyze the financial data through horizontal and vertical analysis for Roadway, and to calculate various financial ratios for Rondo for 2016, including current ratio, acid test ratio, inventory turnover, profit margin, asset turnover, return on assets, and debt to asset ratio.

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Sneha Giji Saji
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1K views

Questions

The document provides comparative balance sheet data for Roadway Corporation and Rondo Corporation for the years 2015 and 2016. It includes assets, liabilities, and equity amounts. It also provides instructions to analyze the financial data through horizontal and vertical analysis for Roadway, and to calculate various financial ratios for Rondo for 2016, including current ratio, acid test ratio, inventory turnover, profit margin, asset turnover, return on assets, and debt to asset ratio.

Uploaded by

Sneha Giji Saji
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

The comparative Balance sheets of Roadway Corporation are presented below

Roadway Corporation

The comparative Balance sheets

December, 31

Assets and liabilities 2016(Rs.) 2015(Rs.)


Assets
Current assets 76,000 80,000
Property, plant and equipment 99,000 90,000
Intangibles 25,000 40,000
Total assets 2,00,000 2,10,000

Liabilities and Owner’s equity 40,800 48,000


Current liabilities 1,43,000 1,50,000
Long-term liabilities 16,200 12,000
Shareholder’s equiy
2,00,000 2,10,000
Total Liabilities and Owner’s equity

(a) Prepare a horizontal analysis of the balance sheet data for Roadway corporation, using 2015 as
the base
(b) Prepare a vertical analysis of the balance sheet data for Roadway corporation, for 2016

2. Rondo Corporation’s comparative Balance sheets are presented below

Rondo Corporation

The comparative Balance sheets

December, 31

Assets and liabilities 2016(Rs.) 2015(Rs.)


Cash 5,300 3,700
Accounts receivable 21,200 23,400
Inventory 9,000 7,000
Land 20,000 26,000
Buildings 70,000 70,000
Accumulated depreciation – buildings (15,000) (10,000)
1,10,500 1,20,100
Total 10,370 31,100
Accounts payable 75,000 69,000
Common stock 25,130 20,000
Retained earnings
1,10,500 1,20,100
Total
Rondo’s 2016 income statement included net sales of Rs.1,20,000, cost of goods sold of Rs.70,000 and
net income of Rs. 14,000. Compute the following ratios for 2016

(a) Current ratio,(b) acid test ratio (c ) accounts receivable turnover,(d) inventory turnover
(e) profit margin, (f) asset turnover (g) return on assets (h) return on shareholder’s equity and(i)
debt to asset ratio

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