Asked by Kiera Gover on Jun 08, 2024
Verified
Indicate the effect of each item on the particular ratio of that row of the schedule.In the last column of the schedule,place the answer of the effect of the item on the ratio.Use the letter I for increase in the ratio,D for decrease in the ratio,and N for no effect on the ratio.Each item is independent of the others.
Schedule Analysis
A method used to examine and interpret the timing and amounts of future cash flows, expenses, or revenues.
Independent Items
Elements or transactions that do not influence or are not influenced by other items within a financial statement or business process.
- Evaluate the impact of definite transactions on financial ratios and the financial position of an organization.
- Acquire knowledge on the connection between financial statements adjustments, such as depreciation and bad debt expense, and their effect on financial ratios.
Verified Answer
FL
Fareeza LokmanJun 11, 2024
Final Answer :
A.Cash increases the numerator of current assets.Bonds Payable has no effect.
B.Inventory is not a quick asset.Accounts payable decreases the denominator of the ratio.
C.Receivables will be collected slower.
D.Shares outstanding increases the denominator of the ratio.
E.Cash increases current assets more than the removal of short-term investment decreases current assets.The numerator of the ratio increases.
F.Removing the building from the books reduces the denominator of the ratio.
G.Gross profit decrease of .30 decreases profit margin by more than the existing .25 ratio.
B.Inventory is not a quick asset.Accounts payable decreases the denominator of the ratio.
C.Receivables will be collected slower.
D.Shares outstanding increases the denominator of the ratio.
E.Cash increases current assets more than the removal of short-term investment decreases current assets.The numerator of the ratio increases.
F.Removing the building from the books reduces the denominator of the ratio.
G.Gross profit decrease of .30 decreases profit margin by more than the existing .25 ratio.
Learning Objectives
- Evaluate the impact of definite transactions on financial ratios and the financial position of an organization.
- Acquire knowledge on the connection between financial statements adjustments, such as depreciation and bad debt expense, and their effect on financial ratios.
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