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 $ 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 $ 61,565 Owners’ equity Common stock and paid-in surplus $ 44,000 $ 44,000 Accumulated retained earnings 237,116 267,435 Fixed assets Net plant and equipment $ 328,695 $ 362,400 Total $ 281,116 $ 311,435 Total assets $ 391,671 $ 430,000 Total liabilities and owners’ equity $ 391,671 $ 430,000 SMOLIRA GOLF CORP. 2018 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 (24%) 17,154 Net income $ 54,319 Dividends $ 24,000 Retained earnings 30,319 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.)

Answer 1

Answer:

the requirements are missing, so I looked for a similar question:

a. Current ratio = current assets / current liabilities

2017 = $62,976 / $50,555 = 1.25

2018 =  $67,600 / $57,000  = 1.19

b. Quick ratio = (current assets - inventory) / current liabilities

2017 = ($62,976 - $26,042) / $50,555 = 0.73

2018 = ($67,600 - $27,500) / $57,000  = 0.70

c. Cash ratio = cash / current liabilities

2017 =  $24,086 / $50,555 = 0.48

2018 = $24,500 / $57,000 = 0.43

d. Total asset turnover = sales / average total assets

2018 = $373,473 / [($391,671 + $430,000) / 2] = 0.91

e. Inventory turnover = cost of goods sold / average inventory

2018 = $254,500 / [($26,042 + $27,500) / 2] = 9.51

f. Receivables turnover = sales / average accounts receivable

2018 = $373,473 / [($12,848 + $15,600) / 2] = 26.26

g. Profit margin = net profit /  total sales

2018 = $54,319 / $373,473 = 14.54%

h. Return on assets = net income / average total assets

2018 = $54,319 / [($391,671 + $430,000) / 2] = 13.22%

i. Return on equity = net income / average equity

2018 = $54,319 / [($281,116+ $311,435) / 2] = 18.33%