Accounting Questions
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questions.docxQuestion 1
Ratios
Ratios provide the users of financial statements with a great deal of information about the entity. Do ratios tell the whole story? How could liquidity ratios be used by investors to determine whether or not to invest in a company?
Question 2
|
|
Year Ending December 2012 |
Year Ending December 2011 |
Year Ending December 2010 |
|
Revenue |
40,00 |
35,00 |
33,00 |
|
Operating Expense |
|
|
|
|
Salarie |
15,00 |
10,00 |
9,00 |
|
Maintenance and Repair |
6,00 |
9,00 |
10,00 |
|
Rental Expens |
2,50 |
2,50 |
2,50 |
|
Depreciatio |
2,00 |
2,00 |
2,00 |
|
Fue |
4,00 |
3,50 |
2,50 |
|
Total Operating Expense |
29,50 |
27,00 |
26,00 |
|
Operating Incom |
10,50 |
8,00 |
7,00 |
|
Sales and Administrative Expense |
6,00 |
4,00 |
3,00 |
|
Interest Expens |
2,50 |
2,00 |
1,00 |
|
Net Incom |
2,00 |
2,00 |
3,00 |
Above is a comparative income statement for Cecil, Inc. for the years 2010, 2011, and 2012. Calculate the net-profit margin for each of these years. Comment on the profit margin trend.
