Task Team of FUNDAMENTAL ACCOUNTING School of Business. Sun Y at-sen University other assets 00 23 3.40017 Total assets $210.000 182,400($27,600(13%) (b)Vertical analysis Amount Percentage Current assets $50.00024% Oper ssets 000 20.0009% Total assets $210,000100% 4. What are some advantages to using ratio analysis? what are some of its limitations? 5. Ratios, like the accounts receivable turnover ratio, can be difficult to interpret. Explain some of the problems associated with this ratio Answer: Under normal circumstances, a short period is better than a long one as it shows that cash is being collected. However, in some situations, there may be valuable customers that take more time to pay but collectibility is assured. In addition, the amount of receivables on the balance sheet at year-end may not be typical of its normal balanceTask Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University Other assets 20,000 23,400 3,40017% Total assets $210,000 $182,400 ($27,600)(13%) ======== ======== ============ (b) Vertical analysis Assets Amount Percentage Current assets $50,000 24% Operational assets 140,000 67% Other assets 20,000 9% Total assets $210,000 100% ======== ==== 4. What are some advantages to using ratio analysis? What are some of its limitations? 5. Ratios, like the accounts receivable turnover ratio, can be difficult to interpret. Explain some of the problems associated with this ratio. Answer: Under normal circumstances, a short period is better than a long one as it shows that cash is being collected. However, in some situations, there may be valuable customers that take more time to pay but collectibility is assured. In addition, the amount of receivables on the balance sheet at year-end may not be typical of its normal balance