Question

2, Some recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 3,251 $ 3,407 Accounts payable $ 2,143 $ 2,580 Accounts receivable 4,777 5,801 Notes payable 1,740 2,096 Inventory 12,438 13,802 Other 88 105 Total $ 20,466 $ 23,010 Total $ 3,971 $ 4,781 Long-term debt $ 13,600 $ 16,360 Owners’ equity Common stock and paid-in surplus $ 37,000 $ 37,000 Fixed assets Accumulated retained earnings 15,644 38,966 Net plant and equipment $ 49,749 $ 74,097 Total $ 52,644 $ 75,966 Total assets $ 70,215 $ 97,107 Total liabilities and owners’ equity $ 70,215 $ 97,107 SMOLIRA GOLF, INC. 2019 Income Statement Sales $ 186,970 Cost of goods sold 126,003 Depreciation 5,353 EBIT $ 55,614 Interest paid 1,450 Taxable income $ 54,164 Taxes 18,957 Net income $ 35,207 Dividends $ 11,885 Retained earnings 23,322 2a), Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): 2018 2019 Short-term solvency ratios a. Current ratio b. Quick ratio Asset utilization ratios c. Total asset turnover d. Inventory turnover Long-term solvency ratios e. Total debt ratio f. Debt-equity ratio g. Equity multiplier Profitability ratios h. Profit margin i. Return on assets j. Return on equity 2b), Construct the Dupont Identity for Smolira Golf, Inc. Profit margin Total asset turnover Equity multiplier Return on equity (Using Dupont Identity)

Answer 1

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