Altosd Co Balance Sheet At December 31, 2013 Assets Cash Accounts receivable (ne

Question

Altosd Co Balance Sheet At December 31, 2013 Assets Cash Accounts receivable (net) Property, plant, and equipment (net S 150 200 300 1.100 Total assets Liabilaties and shareholders' equity Current liabslities Long-term liabilaties Paid-in capital Retained earnings S 450 600 15o 1000 ?202 Total liabilites and shareholders' equity Selected 2013 income statement information for Altoid Co. includes: Net sales Operating expenses Income before interest and taxes Interest expense Income tax expense Net income $7.700 590 90 350 Required Compute the following financial statement ratios for 2013 Altoid Co.'s current ratio. Round your answer to two decimal places Altoid Co.'s acid-test ratio. Round your answer to two decimal places. Altoid Co.'s debt to equity ratio. Round your answer to two decimal places.

Explanation / Answer

Answer to Problem 6:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = (Total Assets - Property, Plant and Equipment, net) / Current Liabilities
Current Ratio = ($2,200 - $1,100) / $450
Current Ratio = 2.44

Quick Ratio = (Current Assets - Inventories) / Current Liabilities
Quick Ratio = (Total Assets - Inventories - Property, Plant and Equipment, net) / Current Liabilities
Quick Ratio = ($2,200 - $450 - $1,100) / $450
Quick Ratio = 1.44

Debt to Equity Ratio = Total Liabilities / Total Equity
Debt to Equity Ratio = (Current Liabilities + Long-term Liabilities) / (Paid-in Capital + Retained Earnings)
Debt to Equity Ratio = ($450 + $600) / ($150 + $1,000)
Debt to Equity Ratio = 0.91

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