2020 2019 Name of Ratio Calculation Ratio Calculation Ratio 1 Current ratio 39271 ÷ 48839 0.80 21760 ÷ 37930 0.57 2 Debt to total assets 54839 ÷ 116071 47.20% 37,930 ÷ 88160 43% 3 Gross profit rate 262931 ÷ 254375 54.10% 254375 ÷ 462500 55.00% 4 Profit margin 37002 ÷ 485625 7.60% 42000 ÷ 462500 9.10% 5 Return on assets 37002...

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Accounting

2020 2019
Name of Ratio Calculation Ratio Calculation Ratio
1 Currentratio 39271 ÷48839 0.80 21760 ÷37930 0.57
2 Debt tototal assets 54839 ÷116071 47.20% 37,930 ÷88160 43%
3 Grossprofit rate 262931 ÷254375 54.10% 254375 ÷462500 55.00%
4 Profitmargin 37002 ÷485625 7.60% 42000 ÷462500 9.10%
5 Returnon assets 37002 ÷102116 36.2% 42000 ÷60670 69.2%
6 Returnon common stockholders' equity (37002 -18000) ÷ 55731 34.1% (42000 -16800) ÷ 36705 68.7%
(a) Comment your finds from the above ratios.
(b) What impact would borrowing an additional $20,000 to buymore equipment have on each of the ratios in (a) above, assumingthat no changes are expected on the income statement and balancesheet? Comment on your findings.

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1 Current ratio is a measure of liquidity The bigger the current ratio the larger is the amount of rupees available per rupee of current liability the more is the firms ability to meet current obligation and the greater is the safety of funds of short term creditors conventionally a current ratio of 21 current assets twice current liabilities is considered satisfactory although there is no See Answer

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		2020		2019
	Name of Ratio	Calculation	Ratio	Calculation	Ratio
1	Currentratio	39271 ÷48839	0.80	21760 ÷37930	0.57
2	Debt tototal assets	54839 ÷116071	47.20%	37,930 ÷88160	43%
3	Grossprofit rate	262931 ÷254375	54.10%	254375 ÷462500	55.00%
4	Profitmargin	37002 ÷485625	7.60%	42000 ÷462500	9.10%
5	Returnon assets	37002 ÷102116	36.2%	42000 ÷60670	69.2%
6	Returnon common stockholders' equity	(37002 -18000) ÷ 55731	34.1%	(42000 -16800) ÷ 36705	68.7%