Question

Bethesda Mining Company reports the following balance sheet information for 2018 and 2019. BETHESDA MINING COMPANY Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 63,014 $ 79,447 Accounts payable $ 187,422 $ 195,111 Accounts receivable 64,781 85,139 Notes payable 82,520 134,088 Inventory 117,852 182,862 Total $ 269,942 $ 329,199 Total $ 245,647 $ 347,448 Long-term debt $ 232,000 $ 168,750 Owners’ equity Common stock and paid-in surplus $ 223,000 $ 223,000 Accumulated retained earnings 179,352 216,427 Fixed assets Net plant and equipment $ 658,647 $ 589,928 Total $ 402,352 $ 439,427 Total assets $ 904,294 $ 937,376 Total liabilities and owners’ equity $ 904,294 $ 937,376 Calculate the following financial ratios for each year: a. Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d. Debt-equity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) e. Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Answer 1

		2018	2019
	Cash	$ 63,014	$ 79,447
	Accounts receivable	$ 64,781	$ 85,139
	Inventory	$       1,17,852	$       1,82,862
	Total current assets	$       2,45,647	$       3,47,448
	Fixed assets: Net plant and equipment	$       6,58,647	$       5,89,928
	Total assets	$       9,04,294	$       9,37,376
	Accounts payable	$       1,87,422	$ 1,95,111
	Notes payable	$ 82,520	$ 1,34,088
	Total current liabilities	$       2,69,942	$       3,29,199
	Long term debt	$       2,32,000	$       1,68,750
	Total liabilities	$       5,01,942	$       4,97,949
	Owner's equity:
	Common stock and paid in surplus	$       2,23,000	$       2,23,000
	Accumulated retained earnings	$       1,79,352	$       2,16,427
	Total owners' equity	$       4,02,352	$       4,39,427
	Total liabilities & owners' equity	$       9,04,294	$       9,37,376
a]	Current ratio [Current asset/Current liabilities]	0.91	2.06
b]	Quick ratio [(Cash+Accounts receivable)/Current liabilities]	0.47	0.50
c]	Cash ratio [Cash/Current liabilities]	0.23	0.24
d]	Debt/Equity ratio [Total liabilities/Total equity]	1.25	1.13
	Equity multiplier [Total assets/Total equity]	2.25	2.13
e]	Total debt ratio [Total debt/Total assets]	0.56	0.53