Whispering Company has been operating for several years, and on December 31, 2017, presented the following...

Whispering Company has been operating for several years, and on December 31, 2017, presented the following balance sheet. WHISPERING COMPANY BALANCE SHEET DECEMBER 31, 2017 Cash $44,000 Accounts payable $82,100 Receivables 74,000 Mortgage payable 126,600 Inventory 92,800 Common stock ($1 par) 142,400 Plant assets (net) 224,100 Retained earnings 83,800 $434,900 $434,900 The net income for 2017 was $23,500. Assume that total assets are the same in 2016 and 2017.

Compute each of the following ratios. (Round answers to 2 decimal places, e.g. 1.59 or 45.87%.)

(a) Current ratio

(b) Acid-test ratio

(c) Debt to assets ratio %

(d) Return on assets %

Expert Solution

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Current Ratio	Current Assets/Current Liabilities	210800/82100	2.57

Cash	$ 44,000
Receivable	$ 74,000
Inventory	$ 92,800
Current Assets	$ 210,800



Accounts Payable	$ 82,100
Current Liabilities	$ 82,100


Acid Test Ratio	Quick Assets/Current Liabilities	118000/82100	1.44

Cash	$ 44,000
Receivable	$ 74,000

Quick Assets	$ 118,000


Debt to Asset Ratio	Debt/Total Assets	208700/434900	47.99%

Cash	$ 44,000
Receivable	$ 74,000
Inventory	$ 92,800
Plant	$ 224,100
Total Assets	$ 434,900

Accounts Payable	$ 82,100
Mortgagte Payable	$ 126,600
Total Debt/Liabilities	$ 208,700

Return on Assets	Net Income/Total Assets	23500/434900	5.40%

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