Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 30

Preparing and Interpreting IFRS Financial Statements
Glücklich Golfspieler (GG) is a golf club company headquartered in Germany. The company began its 2013 fiscal year with assets totaling 10 million euro but ended the year (on December 31, 2013) with 13 million euro of total assets. Account balances on December 31, 2013, appear below (in thousands of euro).

Required:
1. Prepare a statement of financial position at December 31, 2013, using Exhibit 5.12 as a guide.
2. Use an appropriate ratio to compute GG's financing risk. Compare GG's ratio to the 0.20 reported for one of its close competitors. Which company appears more likely to pay its liabilities
3. Use an appropriate ratio to compute the amount of profit GG earns from each euro of sales. Compare GG's ratio to its competitor, which had a ratio of 0.05. Which company is better able to control its expenses
4. Use an appropriate ratio to compute GG's efficiency at using assets to generate sales. Compare GG's ratio to the 2.60 reported for its competitor. Which company is more efficient at using its assets to generate sales