Using the Following Amounts Taken from the Balance Sheet and Income

Essay

Using the following amounts taken from the balance sheet and income statement of a business, compute the measures listed below. After each answer, write "L" if it is a measure of liquidity or "P" if it is a measure of profitability. Round to two decimal places.
$\begin{array}{lrlr}\text { Current assets } & \$ 6,000 & \text { Average owner's equity } & \$ 15,000 \\\text { Average total assets } & 30,000 & \text { Net sales } & 19,500 \\\text { Current liabilities } & 4,500 & \text { Net income } & 2,400 \\\text { Long-term liabilities } & 10,500 & &\end{array}$
a. Return on assets
b. Working capital
c. Return on equity
d. Current ratio