Bethesda Mining Company reports the following balance sheet information for 2015

Question

Bethesda Mining Company reports the following balance sheet information for 2015 and 2016 BETHESDA MINING COMPANY Balance Sheets as of December 31. 2015 and 2016 2015 2016 2015 2016 Assets Liabilities and Owners' Equity Current assets Cash Accounts receivable Inventory $ 34,678 44,680 79,639 130,795 197 317 $ 224,754 S 321,636 Current liabilities Notes payable Long-term debt $192,922 200,611 139,588 $ 280,942 S 340,199 $ 243,000 179,750 Accounts payable 59,281 88,020 Total Total Owners' equity $ 212,000 212,000 179,065 $ 358,359 S 391,065 $ 882,301 $ 911,014 Common stock and paid-in surplus Accumulated retained earnings Fixed assets 146,359 657,547 589,378 $882,301 S 911,014 Total Net plant and equipment Total assets Total liabilities and owners' equity Based on the balance sheets given for Bethesda Mining, calculate the following financial ratios for each year: a. Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Current ratio 2015 times 2016 imes b. Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Quick ratio 2015 2016 times times c. Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Cash ratico 2015 times 2016 times

Explanation / Answer

Answer a.

Current Ratio = Current Assets / Current Liabilities

2015:

Current Ratio = $224,754 / $280,942
Current Ratio = 0.80

2016:

Current Ratio = $321,636 / $340,199
Current Ratio = 0.95

Answer b.

Quick Ratio = (Current Assets - Inventory) / Current Liabilities

2015:

Quick Ratio = ($224,754 - $130,795) / $280,942
Quick Ratio = 0.33

2016:

Quick Ratio = ($321,636 - $197,317) / $340,199
Quick Ratio = 0.37

Answer c.

Cash Ratio = Cash / Current Liabilities

2015:

Cash Ratio = $34,678 / $280,942
Cash Ratio = 0.12

2016:

Cash Ratio = $44,680 / $340,199
Cash Ratio = 0.13

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.