Question

Some recent financial statements for Smolira Golf Corp. follow.

  

SMOLIRA GOLF 2011 and 2012 Balance Sheets
Assets									Liabilities and Owners’ Equity
	2011				2012					2011				2012
Current assets									Current liabilities
Cash	$	23,066			$	25,300			Accounts payable	$	24,384			$	28,300
Accounts receivable		13,648				16,400			Notes payable		14,000				12,000
Inventory		27,152				28,300			Other		12,771				19,700
Total	$	63,866			$	70,000			Total	$	51,155			$	60,000
									Long-term debt	$	81,000			$	90,000
									Owners’ equity
									Common stock and paid-in surplus	$	55,000			$	55,000
									Accumulated retained earnings		213,406				229,000
Fixed assets
Net plant and equipment	$	336,695			$	364,000			Total	$	268,406			$	284,000
Total assets	$	400,561			$	434,000			Total liabilities and owners’ equity	$	400,561			$	434,000

SMOLIRA GOLF, INC. 2012 Income Statement
Sales					$	333,706
Cost of goods sold						215,200
Depreciation						49,300
Earnings before interest and taxes					$	69,206
Interest paid						15,500
Taxable income					$	53,706
Taxes (30%)						16,112
Net income					$	37,594
Dividends	$	22,000
Retained earnings		15,594

   

Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): (Round your answers to 2 decimal places. (e.g., 32.16))

  

Short-term solvency ratios:		2011	2012
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:		2011	2012
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