Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

Exercise 23

Shown below is selected information from the financial statements of Dickson, Inc., a retail furniture store.

Instructions
a.xplain how the interest expense shown in the income statement could be $84,000, when the interest payment appearing in the statement of cash flows is only $79,000.
b.ompute the following (round to one decimal place):
1.urrent ratio
2.uick ratio
3.orking capital
4.ebt ratio
c.omment on these measurements and evaluate Dickson, Inc.'s short-term debt-paying ability.
d.ompute the following ratios (assume that the year-end amounts of total assets and total stockholders' equity also represent the average amounts throughout the year):
1.eturn on assets
2.eturn on equity
e.omment on the company's performance under these measurements.xplain why the return on assets and return on equity are so different.
f.iscuss ( 1 ) the apparent safety of long-term creditors' claims and ( 2 ) the prospects for Dickson, Inc., continuing its dividend payments at the present level.