Some recent financial statements for Smolira Golf Corp. follow SMOLIRA GOLF 2011

Question

Some recent financial statements for Smolira Golf Corp. follow SMOLIRA GOLF 2011 and 2012 Balance Sheets Assets Liabilities and Owners' Equity 2011 2011 2012 Current assets Current liabilities Cash Accounts receivable Inventory $ 24,046 12,448 25,392 $ 24,255 15,235 27,155 Accounts payable Notes payable Other $ 23,184 12,000 11,571 $ 27,420 10,800 15,553 Tota $ 61,886 66,645 Total $46,755 $ 53,773 $ 95,000 Long-term debt Owners' equity $ 80,000 Common stock and paid-in surplus Accumulated retained earnings $ 40,000 219,826 $40,000 243,606 Fixed assets Net plant and equipment Total assets $324,695 $365,734 Total $259,826 $283,606 $386,581 $432,379 Total liabilities and owners' equity $386,581 $432,379 SMOLIRA GOLF, INC 2012 Income Statement Sales Cost of goods sold Depreciation $366,996 253,122 32,220 Earnings before interest and taxes Interest paid $ 81,654 14,300 Taxable income Taxes (35%) $ 67,354 23,574 Net income $ 43,780 Dividends Retained earnings $20,000 23,780 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))

Explanation / Answer

a). Current ratio:-

2011:- 61,886 / 46,755 = 1.32

2012:- 66,645 / 53,773 = 1.24

b). Quick Ratio:- (Current Assets - Inventory) / Current Liabilities

2011:- (61,886 - 25,392) / 46,755 = 0.78

2012:- (66,645 - 27,155) / 53,773 = 0.73

c). Cash Ratio:- (cash + cash equivalents) / current liabilities

   2011:- 24,046 / 46,755 = 0.51

2012:- 24,255 / 53,773 = 0.45

d). Total assets turnover ratio:- sales / total assets

   2012:- 366,996 / 432,379 = 0.85

e). Inventory turnover ratio:- sales / Inventory

366,996 / 27,155 = 13.51

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