Compare and Contrast the Chapter 4 ending Profit and Loss Statement through February with the end of Chapter 5 Profit and Loss statement through the end of March for Kristin Raina Interior Designs
Compare and Contrast the Balance Sheet as of February 28th with the balance sheet as of March 31st. After analyzing the statements, answer the following questions:
- What is the financial situation of the company as of February 28th?
- Did the financial situation improve, remain the same, or start to decline through the month of March?
- What areas of strength exist in the company? What are the company’s weaknesses?
- What are some areas where the company has opportunities for growth for the company’s financial situation?
- In order to help you justify the above answers, financial ratios should be calculated. At minimum the following ratios should be calculated and used to support your arguments:
- Debt to Equity Ratio (Total Liabilities/Equity) This ratio provides a look at how much the creditors have put into the company compared to how much the owners have put into the company.
- Current Ratio (Current Assets/Current Liabilities) This provides a look at whether or not the business has enough current assets to pay their current liabilities.
- Profit Margin (Net Income/Sales) This provides a measure of how much profit is earned on each dollar of sales.