Question

# 8

Bethesda Mining Company reports the following balance sheet information for 2015 and 2016.

BETHESDA MINING COMPANY Balance Sheets as of December 31, 2015 and 2016
	2015				2016					2015				2016
Assets									Liabilities and Owners’ Equity
Current assets									Current liabilities
Cash	$	67,906			$	85,508			Accounts payable	$	186,422			$	194,111
Accounts receivable		65,781				86,139			Notes payable		81,520				133,088
Inventory		115,499				180,234			Total	$	267,942			$	327,199
Total	$	249,186			$	351,881			Long-term debt	$	230,000			$	166,750
									Owners’ equity
									Common stock and paid-in surplus	$	225,000			$	225,000
Fixed assets									Accumulated retained earnings		185,091				222,960
Net plant and equipment	$	658,847			$	590,028			Total	$	410,091			$	447,960
Total assets	$	908,033			$	941,909			Total liabilities and owners’ equity	$	908,033			$	941,909

Based on the balance sheets given for Bethesda Mining, 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.)

Current ratio

2015 ___ times

2016 ___ times

b. Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Quick ratio

2015 ___ times

2016 ___ times

c. Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Cash ratio

2015 ___ times

2016 ___ times

d. Debt−equity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Debt−equity ratio Equity multiplier

2015 ___ times   2015 ___ times

2016 ___ times   2016 ___ times

e. Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Total debt ratio

2015 ___ times

2016 ___ times

Answer 1