Question

2006 2005 Balance Sheet for the period ending June 30 Assets Current assets Cash Accounts receivables Inventories Prepaid expenses Total current assets Property and equipment Total assets $21,000 $160,000 $300,000 $9,000 $490,000 $810,000 $1,300,000 $24,000 $162,000 $315,000 $10,000 $511,000 $700,000 $1,211,000 Liabilities and shareholders equity Liabilities Current liabilities 10% bonds payable Total liabilities $200,000 $300,000 $500,000 $290,000 $275,000 $565,000
PLEASE TYPE THIS ON A COMPUTER SO IT CAN BE NEAT LIKE THE IMAGE BELOW !! PLEASE DO NOT WRITE. TYPE THE ANSWER SO IT CAN BE SIMILAR TO THIS :

Answer 1

				2006		2005
1)	Gross Margin Percentage	Gross Margin		8,40,000	0.4	7,10,000	0.37
		Sales		21,00,000		19,00,000
2)	Net Income Percentage	Net income		1,05,000	0.05	85,000	0.045
		Sales		21,00,000		19,00,000
3)	Current Ratio	Current Assets		4,90,000	2.45	5,11,000	1.76
		Current Liabilities		2,00,000		2,90,000
4)	Acid Test ratio	Current Assets- Inventory- Prepaid Expenses		4,90,000-3,00,000-9,000	0.905	5,11,000-3,15,000-10,000	0.64
		Current Liabilities		2,00,000		2,90,000
5)	Inventory Turnover	Cost of goods sold		12,60,000	2.049	11,90,000	2.07
		Average Inventory		3,00,000+3,15,000		3,15,000+2,60,000
6)	Debt to Equity Ratio	Debt		3,00,000	0.231	2,75,000	0.227
		Equity		13,00,000		12,11,000
7)	Interest cover ratio	EBIT ( Earning before interest & tax)		1,80,000	6	2,00,000	3.33
		Interest Expense		30,000		60,000

Liquidity is a measure of company's ability to use current asset to cover current liabilties. This ratio is better in 2006 than 2005.

Profitability is measured by Gross profit & Net profit ratios. Both has increased in 2006 as compared to 2005.