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3 years ago

Compute and Interpret Liquidity and Solvency Ratios

Business

1 answer:

strojnjashka [21]3 years ago

3 0

Answer:

See answers below

Explanation:

1. Compute current ratio

Current ratio(2016) = Current assets / Current liabilities

= $6,594,351 / $5,827,005

= 1.13:1

Current ratio(2017) = Current assets / Current liabilities

= $6,905,075 / $7,674,670

= 0.89:1

Compute quick ratio

Quick ratio (2016) = Cash + Net receivables / Current liabilities

= $3,726,549 + $499,142 / $5,827,005

= $4225691 / $5827005

= 0.72:1

Quick ratio (2017) = Cash + Net receivables / Current liabilities

= $3,701,247 + $515,381 / $7,674,670

= $6,905,075 / $7,674,670

= 0.55:1

b. Compute debt to equity ratio

Debt to equity (2016) = Total liabilities / Stockholder's equity

= $16,750,167 / $6,247,242

= 2.68:1

Debt to equity (2017) = Total liabilities / Stockholder's equity

= $23,022,980 / $5,965,725

= 3.86:1

Compute times interest earned ratio

Times interest ratio(2017) = Earning before interest and income tax / Interest expense

• Please note that in 2017, loss before income taxes ($2,209,032) , hence no ratio is computed

c. Compute the cash burn rate for 2017.

Cash burn rate (2017) = Opening cash balance - Closing cash balance / Months

= $3,726,549 - $3,701,247 / 12

= $2,108

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Step2247 [10]

Answer:

Total cash receipts in October = $137,300

Total cash receipts in November = $120,825

Total cash receipts in December = $164,925

Explanation:

As per the data given in the question,

Total cash receipts in October = Cash sales in October + September sales collection in October + October sales collection in October

= $108,000 × 30% + $86,000 + $108,000 ×70% × 25%

= $137,300

Total cash receipt in November = Cash sales in November + October sales collection in November + November sales collection in November

= $135,000 × 30% + $108,000 × 70% × 75% + $135,000 × 70% × 25%

= $120,825

Total cash receipt in December = Cash sales in December + November sales collected in December + December sales collected in December

= $198,000×30% + $135,000 × 70% × 75% + $198,000 × 70% × 25%

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4 years ago

What is the amount of trumpeter's total stockholders equity?

Anuta_ua [19.1K]

The amount of trumpeters total stockholder equity is $68,000

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3 years ago

Sigma Corporation owns 80% of the stock of Epsilon Corporation, which pays it a dividend of $100,000. Sigma Corporation also own

kvv77 [185]

Answer:

d. $132,000

Explanation:

Sigma Corporation holds the stock of Epsilon Corporation and is subsidiary for the Sigma. The dividend declared by of $100,000 is entirely for the sigma whereas Sigma Corporation also holds 20% of the shares of Intergalactic Corporation. The dividend of $40,000 will be calculated in the dividend amount of Sigma but 20% will be deducted.

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3 years ago

Your boss gave you a project to complete in 1 week. How would you go about

Paladinen [302]

Answer:

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3 years ago

Amram Inc. can issue a 20-year bond with a 6% annual coupon at par. This bond is not convertible, not callable, and has no sinki

Reil [10]

Answer:

B) The coupon rate could be less than, equal to, or greater than 6%, depending on the specific terms set, but in the real world the convertible feature would probably cause the coupon rate to be less than 6%.

Explanation:

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