Describe the differences between the liquidity ratios, solvency ratios and profitability ratios. Identify examples of each type of ratio as well.
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Liquidity ratios indicate a company's ability to pay short-term debts. They focus on current assets and current liabilities. Examples include current ratio, quick ratio, accounts receivable ratios, and inventory ratios. Solvency ratios are used to analyze a company's long-term debt-paying ability and its financing structure. Solvency ratios include debt to assets ratio, debt to equity ratio, and times interest earned ratio. Profitability measures concern a company's ability to generate earnings. These ratios include net margin, asset turnover ratio, return on investment, and return on equity.
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As a retailer, why might you increase the number of private-label brands you sell?
What will be an ideal response?
Use this information to answer the following question. The following totals for the month of September were taken from the payroll register of Meadors Company: Salaries expense $24,000 Social Security and Medicare taxes withheld 1,100 Income taxes withheld 5,000 Medical insurance deductions 500 Life insurance deductions 400 Salaries subject to federal and state unemployment taxes of 6.2 percent
8,000 The journal entry to record the monthly payroll on September 30 would include a A) debit to Salaries Expense for $24,000. B) debit to Salaries Payable for $24,000. C) credit to Salaries Payable for $24,000. D) debit to Salaries Expense for $9,000.