Question

Some recent financial statements for Smolira Golf Corp. follow.

  

SMOLIRA GOLF CORP. 2014 and 2015 Balance Sheets
Assets									Liabilities and Owners’ Equity
	2014				2015					2014				2015
Current assets									Current liabilities
Cash	$	24,086			$	24,500			Accounts payable	$	23,584			$	27,500
Accounts receivable		12,848				15,600			Notes payable		15,000				11,200
Inventory		26,042				27,500			Other		11,971				18,300
Total	$	62,976			$	67,600			Total	$	50,555			$	57,000
									Long-term debt	$	60,000			$	73,000
									Owners’ equity
									Common stock and paid-in surplus	$	44,000			$	44,000
									Accumulated retained earnings		237,116				256,000
Fixed assets
Net plant and equipment	$	328,695			$	362,400			Total	$	281,116			$	300,000
Total assets	$	391,671			$	430,000			Total liabilities and owners’ equity	$	391,671			$	430,000

SMOLIRA GOLF CORP. 2015 Income Statement
Sales					$	373,473
Cost of goods sold						254,500
Depreciation						32,800
Earnings before interest and taxes					$	86,173
Interest paid						14,700
Taxable income					$	71,473
Taxes (40%)						28,589
Net income					$	42,884
Dividends	$	24,000
Retained earnings		18,884

   

Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): (Enter your profitability ratio answers as a percent rounded to 2 decimal places, e.g., 32.16. Round the remaining answers to 2 decimal places, e.g., 32.16.)

  

Short-term solvency ratios:		2014	2015
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:		2014	2015
g.	Total debt ratio	times	times
h.	Debt–equity ratio	times	times
i.	Equity multiplier	times	times

  

j.	Times interest earned	times
k.	Cash coverage ratio	times

  

Profitability ratios:
I.	Profit margin	%
m.	Return on assets	%
n.	Return on equity	%

Answer 1