How can ratio calculations and workplace activities support financial analysis and accounting practice?

"3. A friend has been offered a sales position at Draper Media, Inc., a small publisher of computer-related publications, but wants to know more about the company. Because of your expertise in financial analysis, you offer to help analyze Draper’s financial health. Draper has provided the following selected financial information: Account balances on December 31, 2018: Inventory $ 72,000 Chapter 14 Using Financial Information and Accounting 575\n\nNet sales 450,000 Current assets 150,000 Cost of goods sold 290,000 Total liabilities 180,000 Net profit 35,400 Total assets 385,000 Current liabilities 75,000 Other information Number of common shares outstanding 25,000 Inventory at January 1, 2018 48,000 Calculate the following ratios for 2018: acid-test (quick) ratio, inventory turnover ratio, net profit margin, return on equity, debt-to-equity ratio, and earnings per share. Summarize your assessment of the company’s financial performance, based on these ratios, in a report for your friend. What other information would you like to have to complete your evaluation? (Information, Systems) 4. Use the internet and business publications to research how companies and accounting firms are implementing the provisions of the Sarbanes-Oxley Act. What are the major concerns they face? What rules have other organizations issued that relate to Act compliance? Summarize your findings. (Information) 5. Team Activity Two years ago, Rebecca Mardon started a computer consulting business, Mardon Consulting Associates. Until now, she has been the only employee, but business has grown enough to support hiring an administrative assistant and another consultant this year. Before she adds staff, however, she wants to hire an accountant and computerize her financial recordkeeping. Divide the class into small groups, assigning one person to be Rebecca and the others to represent members of a medium-sized accounting firm. Rebecca should think about the type of financial information systems her firm requires and develop a list of questions for the firm. The accountants will prepare a presentation making recommendations to her as well as explaining why their firm should win the account. (Resources, Interpersonal) 6. One of the best ways to learn about financial statements is to prepare them. Put together your personal balance sheet and income statement, using Table 14.1 and Table 14.2 as samples. You will have to adjust the account categories to fit your needs. Here are some suggestions: ◦ Current assets—cash on hand, balances in savings and checking accounts ◦ Investments—stocks and bonds, retirement funds ◦ Fixed assets—real estate, personal property (cars, furniture, jewelry, etc.) ◦ Current liabilities—charge-card balances, loan payments due in one year ◦ Long-term liabilities—auto loan balance, mortgage on real estate, other loan balances that will not come due until after one year ◦ Income—employment income, investment income (interest, dividends) ◦ Expenses—housing, utilities, food, transportation, medical, clothing, insurance, loan payments, taxes, 576 Chapter 14 Using Financial Information and Accounting This OpenStax book is available for free at http://cnx.org/content/col25734/1.7"