Use the following current year financial statements for Abbee Aviation to perform ratio analysis.Abbee Aviation Income StatementRevenue $4,400,000Cost of goods sold 2,300,000Gross profit 2,100,000Operating expenses 750,000Operating income (EBIT) 1,350,000Interest expense 270,000Earnings before taxes 1,080,000Taxes (at 40%) 432,000Net income 648,000Abbee Aviation Balance SheetCurrent assetsCash $2,780,000Accounts receivable 670,000Inventory 750,000Total current assets 4,200,000Non-current assetsFixed assets 5,200,000Accumulated depreciation (2,400,000)Net fixed assets 2,800,000Total assets $7,000,000Current liabilitiesAccounts payable 890,000Accrued liabilities 560,000Total current liabilities 1,450,000Non-current liabilitiesBonds payable 3,000,000Total liabilities 4,450,000Shareholders’ equityCommon stock 550,000Retained earnings 2,000,000Total shareholders’ equity 2,550,000Total liabilities and shareholders’ equity $7,000,000(a) Calculate the firmâ€™s operating return on assets. Assume that the firmâ€™s year-end total assets balance for the prior year was $6 million.(b) Calculate the firmâ€™s net working capital(c) What is the number of â€œaccounts receivable daysâ€ for Abbee Aviation? Assume that the firmâ€™s year-end accounts receivable balance for the prior year was $650,000.(d) What is the firmâ€™s return on assets at the end of this year? Assume that the firmâ€™s year-end total assets balance for the prior year was $6 million. (Points : 40
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Use the following current year financial statements for Abbee Aviation to perform ratio… was first posted on July 1, 2020 at 8:21 am.
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