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Ratio Analysis

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Ron & Levi’s Income Statement For the Year Ending 12/31/2013 Sales Revenue 1,00,000 Less Cost of Goods Sold -60,000 Equals Gross Margin 40,000 Operating Expenses Selling and Administration 15,000 Depreciation 7,000 Total Operating Expense -22,000 Operating Income 18,000 Tax -7,200 Net Income 10,800 Ron & Levi’s Statement of Retained Earnings For the Year Ending 12/31/2013 Beginning Balance 10,000 Net Income 10,800 Less Dividends -3,400 Ending Balance 17,400 Ron & Levi’s Balance Sheet 12/31/2012 & 12/31/2013 Category 2012 2013 Cash 20,000 25,000 Accounts Receivable 15,000 12,000 Inventory 30,000 52,000 Total Current Assets 65,000 89,000 Equipment 70,000 65,000 Less Accumulated Depreciation -15,000 -19,000 Equipment (Net) 55,000 46,000 Total Assets 1,20,000 1,35,000 Accounts Payable 15,000 29,000 Long-term Liabilities 25,000 18,600 Total Liabilities 40,000 47,600 Common Stock 70,000 70,000 Retained Earnings 10,000 17,400 Total Equity 80,000 87,400 Total Liabilities & Equity 1,20,000 1,35,000 Shares of Stock Outstanding Market Price per Share Common Stock Problem 5 Ratio Analysis Use the financial information from Ron & Levi’s Company to compute any three activity ratios, any one liquidity ratio, any one debt ratio, any three profitability ratios, and any two market ratios.