Question

Some recent financial statements for Smolira Golf, Inc., follow.

SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2015 and 2016
	2015				2016					2015				2016
Assets									Liabilities and Owners’ Equity
Current assets									Current liabilities
Cash	$	3,211			$	3,307			Accounts payable	$	2,153			$	2,600
Accounts receivable		4,767				5,781			Notes payable		1,750				2,116
Inventory		12,478				13,782			Other		90				107
Total	$	20,456			$	22,870			Total	$	3,993			$	4,823
									Long-term debt	$	13,400			$	16,160
									Owners’ equity
									Common stock and paid-in surplus	$	38,000			$	38,000
Fixed assets									Accumulated retained earnings		15,654				39,112
Net plant and equipment	$	50,591			$	75,225			Total	$	53,654			$	77,112
Total assets	$	71,047			$	98,095			Total liabilities and owners’ equity	$	71,047			$	98,095

SMOLIRA GOLF, INC. 2016 Income Statement
Sales				$	187,370
Cost of goods sold					126,203
Depreciation					5,333
EBIT				$	55,834
Interest paid					1,430
Taxable income				$	54,404
Taxes					19,041
Net income				$	35,363
Dividends	$	11,905
Retained earnings		23,458

Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profitability ratios as a percent.)

		2015			2016
Short-term solvency ratios
a.	Current ratio		times			times
b.	Quick ratio		times			times
c.	Cash ratio		times			times
Asset utilization ratios
d.	Total asset turnover					times
e.	Inventory turnover					times
f.	Receivables turnover					times
Long-term solvency ratios
g.	Total debt ratio		times			times
h.	Debt−equity ratio		times			times
i.	Equity multiplier		times			times
j.	Times interest earned ratio					times
k.	Cash coverage ratio					times
Profitability ratios
l.	Profit margin					%
m.	Return on assets					%
n.	Return on equity					%

Answer 1

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