Question

Presented here are the comparative balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $580,000. HAMES INC. Balance Sheets December 31, 2020 and 2019 2020 2019 $ 23,000 78,000 103,000 $ 204,000 50,000 125,000 (65,000) $ 314,000 $ 20,000 72,000 99,000 $191,000 40,000 110,000 (60,000) $ 281,000 Assets Cash Accounts receivable Merchandise inventory Total current assets Land Plant and equipment Less: Accumulated depreciation Total assets Liabilities Short-term debt Accounts payable Other accrued liabilities Total current liabilities Long-term debt Total liabilities Stockholders' Equity Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively Retained earnings: $ 18,000 65,600 20,000 $ 103,600 22,000 $ 125,600 $ 17,000 75,500 18,000 $ 110,500 30,000 $ 140,500 $ 74,000 $ 59,000

Answer 1

o Acid test Ratio - Current Assets - Inventrias Current Lichlities 204,000 - 103,00D 103.600 - - 0.97 f) If treasurer decided to pay $15,000 of accounts payable it will impact both coverent Assets are current liabilition Current Assets Cash will be reduced by $15,000, also current liability will be reduced by $15,000 of Accounts payable same way it will import All part of ard impact on ROI & 52.900 x 100 125,602) - 150 47.83 Rol will increase by to 47.837 from 42.12 %. Impact on Rot There will be no impact on Roc, as it is not importing any of the component which is used to Calculate ROE Impact on Rot Working Capital 204,020 - 15,000 -103600 - 150 70,400 It will get decrease to to, 400 from 100,400. As it is impacting both Current Assets and current liabities.

9 impact on Current Ralio 204.00 - 1SVD 189.000 103,600 - 15000 88,600 - 2.13 Current Ratio Aho will get increased to 2.13 from 1. 97. Recerning $15,000 of Accounts recumble will impad to current teal thing as Assels are increase in Cash balance and decrease the Accounts recivable y the same amount. So, Current Assets will remain Sene. hence, there will be no impact on any ratio. from ard in

a) ROI= Net profit - X 100 Total investment Total investment - Current liabilities & long teren delt or Non-urrent liabilities. - 125,600 ROI - 52,900 x 100 125.600 = 42.12% Liabilities 6) ROE - Net Income Share holdes Equity - 52,900 = 0.28 10.3 188,400 o working Capital - Current Assets – Current = 204,0vn - 103,600 = 100,400 D Curret Ralio - Current Assets Current Liabilities 204,000 103,600 2 1.97

Answer 2

roe is net income /((2019equity+2020 equity)/2)*100

52400/((188400+141000)/2)=0.31815*100=31.8

Answer 3

roi is net income/((2019 total assets+2020 total assets)/2)

52400/((314000+282000)/2)=0.1758*100=17.58%