Financial Accounting Report: Analysis of Handyman Services Performance

This financial accounting report analyzes the financial performance of Handyman Services, focusing on key metrics such as the current ratio and debt ratio. The report examines the short-term solvency and liquidity of the business, highlighting that the current ratio is below the ideal standard, indicating potential financial challenges. It also assesses the debt ratio, revealing the proportion of assets financed by debt capital. The report includes a detailed analysis of these ratios, offering insights into the financial health of Handyman Services. The report also includes a bibliography of the sources used for the analysis and the references used in the assignment. This assignment is available on Desklib, a platform providing students with AI-based study tools and resources to enhance their understanding of financial accounting principles and practices.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the Student:
Author’s Note:

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Table of Contents
Answer to question 1:......................................................................................................................2
Answer to question 2:......................................................................................................................5
Answer to question 3:....................................................................................................................10
Answer to question 4:....................................................................................................................11
Answer to question 5:....................................................................................................................13
References and bibliography:........................................................................................................14

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Answer to question 1:

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Answer to question 2:

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Answer to question 3:

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Answer to question 4:

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Answer to question 5:
Current ratio expresses the short-term solvency and short-term liquidity of a business
organization. It can be observed that, the current ratio of the Handyman Service as has been
computed above is 0.75:1 which much below the standards of current ratio is. The ideal degree
of current ratio is 2:1; hence, the Handyman Services is having a poor short-term liquidity and
solvency (Williams & Dobelman 2017). On the other hand, the debt ratio shows how much of
the total assets are financed by the debt capital. It can be observed that, almost 37% of the total
assets are financed by the debt capital, and rest of the part of the assets is backed by the equity
capital.

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References and bibliography:
Harrison Jr, W. T., Horngren, C. T., & Thomas, C. W. (2014). Financial accounting. Pearson
Education.
Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill.
Nobes, C. (2014). International classification of financial reporting. Routledge.
Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific Book
Chapters, 109-169.