Question

1. 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	$	2,971			$	2,907			Accounts payable	$	2,193			$	2,680
Accounts receivable		4,727				5,701			Notes payable		1,790				2,196
Inventory		12,638				13,702			Other		98				115
Total	$	20,336			$	22,310			Total	$	4,081			$	4,991
									Long-term debt	$	14,100			$	16,860
									Owners’ equity
									Common stock and paid-in surplus	$	42,000			$	42,000
Fixed assets									Accumulated retained earnings		15,694				39,696
Net plant and equipment	$	55,539			$	81,237			Total	$	57,694			$	81,696
Total assets	$	75,875			$	103,547			Total liabilities and owners’ equity	$	75,875			$	103,547

SMOLIRA GOLF, INC. 2016 Income Statement
Sales				$	188,970
Cost of goods sold					127,003
Depreciation					5,253
EBIT				$	56,714
Interest paid					1,350
Taxable income				$	55,364
Taxes					19,377
Net income				$	35,987
Dividends	$	11,985
Retained earnings		24,002

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					%

2. Kaleb’s Karate Supply had a profit margin of 12 percent, sales of $23.8 million, and total assets of $8.8 million.

What was the total asset turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Total asset turnover ________ times

If management set a goal of increasing total asset turnover to 2.75 times, what would the new sales figure need to be, assuming no increase in total assets? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar, e.g., 32.)

Sales __________ $

Answer 1