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Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall
Edition 9ISBN: 0073527068Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall
Edition 9ISBN: 0073527068
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Step 1 of 8
a | 2008 | 2007 | |
Cash and cash equivalents | $11,875 | $ 9,352 | |
Short-term investments | 12,615 | 6,034 | |
Accounts receivable, net | 2,422 | 1,637 | |
Total quick assets for acid-test ratio (A) | $26,912 | $17,023 | |
Inventories | 509 | 346 | |
Deferred tax assets | 1,447 | 782 | |
Other current assets | 5,822 | 3,805 | |
Total current assets (B) | $34,690 | $21,956 | |
Accounts payable | $ 5,520 | $ 4,970 |
|
Accrued expenses | 8,572 | 4,310 |
|
Total current liabilities (C) | $14,092 | $ 9,280 |
|
Working capital (B - C) | $20,598 | $12,676 |
|
Current ratio (B / C) | 2.5 | 2.4 |
|
Acid-test ratio (A / C) | 1.9 | 1.8 |
|
b. Common stock, no par value | $ 7,177 | $ 5,368 |
|
Retained earnings | 13,845 | 9,101 |
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| Accumulated other comprehensive income | 8 | 63 |
|
Total stockholders’ equity | $21,030 | $14,532 |
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ROE = Net income / Average stockholders’ equity
2008= $4,834 / (($14,532 + $21,030) / 2) = 27.2%
2007= $3,496 / (($9,984 + $14,532) / 2) = 28.5%
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