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Question
Erin, the owner of Sweets To Eat Ice Cream Shoppe, wants to know how her company is operating from a financial perspective. Her CPA has given her the following numbers: Sales $325,000, Operating Profits $50,000, Current Assets $125,000, Current Liabilities $40,000, Total Assets $350,000. The ice cream retail industry norms include Operating Profit Margin 10%, Return on Assets 11% and Current Ratio 2.7. Determine the companys liquidity and compare the value to the industry ratios.
Answer
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