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The accounting department of your company has just delivered a draft of the current year's financial statements to you. The summary is as follows:
| | Beginning of the Year | End of the Year |
| Total Assets | $550,000 | $563,000 |
| Total Liabilities | 210,000 | 200,000 |
| Total Equity | 340,000 | 363,000 |
| Net Income for the Year | | 81,000 |
| Common Shares Outstanding | 21,000 | 21,000 |
You discovered that they have not adjusted for estimated bad debt expenses of $7,600. For each of the following ratios, calculate:
1. The ratio that would have resulted had the error not been discovered (i.e. the incorrect ratio).
2. The correct ratio.
A
B
C
D
E
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10
| | Incorrect: | Correct: | | |
| ROA | | | | |
| ROE | | | | |
| Debt Ratio | | | | |
| EPS | | | | |
| | | | | |
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