# discussion board 2.1

Consider the following financial information:

• Total Equity  = \$500,000
• Total Liabilities  = \$300,000
• Average Inventory = \$150,000
• Cost of Goods Sold = \$4,000,000
• Current Liabilities = \$200,000
• Current Assets = \$600,000
• Net Income = \$100,000
• Net Sales = \$1,000,000
• Average Accounts Recievable = \$125,000
• Average Number of Shares = \$55,000

Given this financial information, answer the following questions:

1. Compute the Debt to Total Assets ratio, and provide a paragraph outlining what this means to a given business (why it is important).
2. Compute the Accounts Receivable Turnover ratio, and provide a paragraph outlining what this means to a given business (why it is important).
3. Compute the Quick Ratio, and provide a paragraph outlining what this means to a given business (why it is important).
4. Compute the Earnings Per Share ratio, and provide a paragraph outlining what this means to a given business (why it is important).

# discussion board 2.1

Consider the following financial information:

• Total Equity  = \$500,000
• Total Liabilities  = \$300,000
• Average Inventory = \$150,000
• Cost of Goods Sold = \$4,000,000
• Current Liabilities = \$200,000
• Current Assets = \$600,000
• Net Income = \$100,000
• Net Sales = \$1,000,000
• Average Accounts Recievable = \$125,000
• Average Number of Shares = \$55,000

Given this financial information, answer the following questions:

1. Compute the Debt to Total Assets ratio, and provide a paragraph outlining what this means to a given business (why it is important).
2. Compute the Accounts Receivable Turnover ratio, and provide a paragraph outlining what this means to a given business (why it is important).
3. Compute the Quick Ratio, and provide a paragraph outlining what this means to a given business (why it is important).
4. Compute the Earnings Per Share ratio, and provide a paragraph outlining what this means to a given business (why it is important).