SMOLIRA GOLF CORP. 2015 Income Statement Sales $396,340 Cost of goods sold 256,0
ID: 2767149 • Letter: S
Question
SMOLIRA GOLF CORP.
2015 Income Statement Sales $396,340 Cost of goods sold 256,000 Depreciation 49,000 Earnings before interest and taxes $91,340 Interest paid 15,000 Taxable income $76,340 Taxes (40%) 30,536 Net income $45,804 Dividends$27,000 Retained earnings 18,804
Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): (Enter your profitability ratio answers as a percent rounded to 2 decimal places, e.g., 32.16. Round the remaining answers to 2 decimal places, e.g., 32.16.)
Some recent financial statements for Smolira Golf Corp. follow.
Explanation / Answer
1
Calculation of Current Ratio
Formula
2014
2015
Current ratio
(Total Current Assets / Total Current Liabilities)
1.20
Times
1.25
Times
(63656/53155)
(68500/55000)
2
Calculation of Quick Ratio
Formula
2014
2015
Quick ratio
(Total Current Assets-Inventory) / Total Current Liabilities)
0.70
Times
0.74
Times
(63656-26392)/53155)
(68500-27800)/55000)
3
Calculation of Cash Ratio
Formula
2014
2015
Cash ratio
(Cash + Cash Equivalents) / Total Current Liabilities)
0.45
Times
0.45
Times
(24116/53155)
(24800/55000)
4
Calculation of Total Asset Turnover Ratio
Formula
2015
Total Asset Turnover Ratio
(Net Sales / Average Total Assets)
(396340 / 414675.50)
0.96
Times
Average total assets = (Beginning total assets + Ending Total assets) /2
= (395351+434000) / 2 = 414675.50
1
Calculation of Current Ratio
Formula
2014
2015
Current ratio
(Total Current Assets / Total Current Liabilities)
1.20
Times
1.25
Times
(63656/53155)
(68500/55000)
2
Calculation of Quick Ratio
Formula
2014
2015
Quick ratio
(Total Current Assets-Inventory) / Total Current Liabilities)
0.70
Times
0.74
Times
(63656-26392)/53155)
(68500-27800)/55000)
3
Calculation of Cash Ratio
Formula
2014
2015
Cash ratio
(Cash + Cash Equivalents) / Total Current Liabilities)
0.45
Times
0.45
Times
(24116/53155)
(24800/55000)
4
Calculation of Total Asset Turnover Ratio
Formula
2015
Total Asset Turnover Ratio
(Net Sales / Average Total Assets)
(396340 / 414675.50)
0.96
Times
Average total assets = (Beginning total assets + Ending Total assets) /2
= (395351+434000) / 2 = 414675.50
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.