Question

Some recent financial statements for Smolira Golf Corp. follow. SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018 Current assets Current liabilities Cash $ 23,056 $ 25,200 Accounts payable $ 24,284 $ 28,200 Accounts receivable 13,548 16,300 Notes payable 13,000 11,900 Inventory 26,982 28,200 Other 12,671 19,900 Total $ 63,586 $ 69,700 Total $ 49,955 $ 60,000 Long-term debt $ 80,000 $ 81,337 Owners’ equity Common stock and paid-in surplus $ 60,000 $ 60,000 Accumulated retained earnings 209,326 232,663 Fixed assets Net plant and equipment $ 335,695 $ 364,300 Total $ 269,326 $ 292,663 Total assets $ 399,281 $ 434,000 Total liabilities and owners’ equity $ 399,281 $ 434,000 SMOLIRA GOLF CORP. 2018 Income Statement Sales $ 375,123 Cost of goods sold 258,000 Depreciation 45,600 Earnings before interest and taxes $ 71,523 Interest paid 15,400 Taxable income $ 56,123 Taxes (21%) 11,786 Net income $ 44,337 Dividends $ 21,000 Retained earnings 23,337 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

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