Please need help this is for my exam coming up would
appreciate if explained. Thank you
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Tuxedo Corporation 1. Evaluate the company’s 2014 liquidity and profitability using the following Industry ratios Use only the 2014 figures (do not use averages) CuF &Current ratio – 1.3x Quick ratio 1.1x Profit margins 8.0% . Asset turnover 1.5X Return on assets(ROA) = 12.0% Debt/equity Return on equity (ROE)-24.0% * 100.0% 2. Assume the company’s results for 2015 were exactly the same as 2014 except for the items below. Calculate liquidity and profitability ratios for 2015 assuming the company took the following actions during 2015 and evaluate your results relative to 2014: Switched suppliers to lower COGS to $432,216; profit increase of $21,884 (assume sales remain at 2014 level). Aggressive promotion reduces Inventory to $72,036, a reduction in assets of $50,564. Administrative expenses reduced to $128,064 through increased cost control; profit increase of $12,236. Sale of excess assets resulting in reduction of assets of $163,016 (sale at net book value). Assume Retained Earnings remains constant in 2015 due to dividends. Common stock is decreased through repurchase of stock. Stock repurchase financed through sale of assets of $163,016 and reduction of Inventory $50,564. Decrease in equity of $213.580. .
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