Question

Selected financial data for Changretta Inc. and Solomon Ltd. (in $ thousands) are presented below.

		Changretta Inc.					Solomon Ltd.
Statement of Comprehensive Income (Loss)
Total revenue			$36,755					$36,333
Cost of sales			18,930					26,136
Gross profit			17,825					10,197
Operating expenses			17,110					8,076
Profit from operations			715					2,121
Interest expense (revenue)			(36	)				535
Other expenses			153					-
Other non-operating income			351					436
Profit before income tax			949					2,022
Income tax expense			325					627
Profit			$624					$1,395

		Changretta Inc.				Solomon Ltd.
Balance Sheet
Current assets			$9,680				$10,838
Non-current assets			38,487				34,096
Total assets			$48,167				$44,934
Current liabilities			$4,958				$6,335
Non-current liabilities			4,766				4,217
Total liabilities			9,724				10,552
Shareholders’ equity			38,443				34,382
Total liabilities and shareholders’ equity			$48,167				$44,934
Additional information:
Average accounts receivable			$1,413				$6,179
Average inventories			3,398				3,676
Average total assets			45,412				45,651
Average total shareholders’ equity			34,200				33,447

For each company, calculate the following ratios: (Round answers to 1 decimal place, e.g. 52.7 or 52.7%.)

					Changretta Inc.				Solomon Ltd.
Liquidity Ratios
	1.		Current ratio
	2.		Receivables turnover				times				times
	3.		Inventory turnover				times				times
	4.		Operating cycle				days				days
Solvency Ratios
	5.		Debt to total assets				%				%
	6.		Interest coverage				times				times
Profitability Ratios
	7.		Gross profit margin				%				%
	8.		Profit margin				%				%
	9.		Asset turnover				times				times
	10.		Return on assets				%				%
	11.		Return on equity				%				%

Answer 1