Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Problems - Set A - Page 83: P2-4A

Answer

Analysis of both company's liquidity, solvency and profitability are as follows;

Work Step by Step

(W-1) Net Sales - Cost of Goods Sold - Operating expense - Interest Expense - Tax Expense = Net Income. (W-2) Current Liabilities + Long Term Liabilities (W-3) Current Assets + Plant Assets (net)
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