Question

Just Dew It Corporation reports the following balance sheet information for 2014 and 2015.

  

JUST DEW IT CORPORATION 2014 and 2015 Balance Sheets
Assets									Liabilities and Owners’ Equity
	2014				2015					2014				2015
Current assets									Current liabilities
Cash	$	12,000			$	17,775			Accounts payable	$	46,875			$	55,575
Accounts receivable		12,750				16,425			Notes payable		19,125				24,750
Inventory		50,250				56,925
Total	$	75,000			$	91,125			Total	$	66,000			$	80,325
									Long-term debt	$	30,000			$	27,000
									Owners’ equity
									Common stock and paid-in surplus	$	45,000			$	45,000
									Retained earnings		234,000				297,675
Net plant and equipment	$	300,000			$	358,875			Total	$	279,000			$	342,675
Total assets	$	375,000			$	450,000			Total liabilities and owners’ equity	$	375,000			$	450,000

  

Based on the balance sheets given for Just Dew It:

    

a.	Calculate the current ratio for each year.

Calculate the quick ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

    

	2014	2015
Quick ratio	times	times

  

c.	Calculate the cash ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

    

	2014	2015
Cash ratio	times	times

  

d.	Calculate the NWC to total assets ratio for each year. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

     

	2014	2015
NWC ratio	%	%

  

e.	Calculate the debt–equity ratio and equity multiplier for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

  

	2014	2015
Debt-equity ratio	times	times
Equity multiplier

    

f.	Calculate the total debt ratio and long-term debt ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

  

	2014	2015
Total debt ratio	times	times
Long-term debt ratio	times	times

Answer 1