Grady Home Health has a profit margin of 15 percent on sales of $20 million. If the firm has debt of $7.5 million and total assets of $22.5 million, what is Grady’s return on assets?

Common-size financial statements are created by dividing all income statement items and balance sheet accounts by total assets.

Which of the following statements about the income statement is most correct?

Which of the following statements about the balance sheet is most correct?

Because financial statements are based on historical data, financial statement analysis is typically used only to evaluate an organization’s past financial condition.

Common-size financial statements are created by dividing all income statement items and balance sheet accounts by total assets.

Which of the following statements about the income statement is most correct?

Consider the following balance sheet:Cash $70,000Accounts receivable $30,000Inventories $50,000Net fixed assets $350,000Total assets $500,000Accounts payable $30,000Long-term debt $20,000Common stock $200,000Retained earnings $250,000Total liabilities and equity $500,000Assume that the business uses $10,000 of its cash to pay for supplies that were ordered on credit terms and have already been received and booked (recorded on the balance sheet). Which of the following statements reflects the resulting balance sheet change?

Which of the following statements about the balance sheet is most correct?

Consider the following balance sheet:Cash $70,000Accounts receivable $30,000Inventories $50,000Net fixed assets $350,000Total assets $500,000Accounts payable $30,000Long-term debt $20,000Common stock $200,000Retained earnings $250,000Total liabilities and equity $500,000Assume that the business uses $10,000 of its cash to pay for supplies that were ordered on credit terms and have already been received and booked (recorded on the balance sheet). Which of the following statements reflects the resulting balance sheet change?