a.Depreciation expense is expressed as a percentage of sales
b.Quick ratio is calculated for the company's different divisions
c.Operating expenses are expressed as a percentage of industry average
d.Current ratio is compared to industry average
Cost of goods sold 50% of sales
Operating expense 14% of sales
Using the information above, calculate net income (net loss) for Magenta Company. Assume the income tax rate is 40%.
a.They measure the earning ability of a company.
b.They measure the ability of a company to purchase assets.
c.They measure the ability of a company to meet its long- and short-term obligations.
d.They measure the ability of a company to meet its current obligations.
a.Current Ratio = Current Liabilities / Current Assets
b.Current Ratio = Current Assets / Current Liabilities
c.Current Ratio = (Total Liabilities - Current Liabilities) / Current Assets
d.Current Ratio = (Total Assets - Current Assets) / Current Liabilities
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