Find the following financial ratios for Smolira Golf Corp. (use year-end figures
ID: 2769807 • Letter: F
Question
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.)
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.)
Explanation / Answer
Short-Term Solvency Ratios:
A.The current ratio is current assets divided by current liabilities:
2014 2015
Current Ratio = $63916/54355 $68800/$56000
Current Ratio= 1.18 1.23
B.Quick RatioThe quick ratio is current assets minus inventory divided by current liabilities:
2014 2015
($63916-$26542)/$54355 ( $68800-$27900)/$56000
0.69 0.73
Cash Ratio:The cash ratio is cash divided by current liabilities:
2014 2015
$24126/$54355 $27900/$56000
0.44 0.44
Asset Utilization Ratios:
Total Asset Turnover (TAT) 2015
The TAT ratio is net sales divided by total assets:
TAT ratio=$392907/$431000 =0.91
Inventory Turnover 2015:The inventory turnover ratio is cost of goods sold divided by inventory:
ITR=$256500/$27900=9.19
Accounts Receivables (A/R) Turnover 2015
The A/R turnover ratio is net sales divided by accounts receivable:
ATR=$392907/$16000=24.56
Long-Term Solvency Ratios:
Total Debt Ratio
The total debt ratio is total debt (total assets minus total equity) divided by total assets:
2014 2015
Total Debt Ratio ($396611-$265256)/$396611 ($431000-$288000)/$431000
0 .33 0.33
Debt-Equity Ratio
The debt-equity ratio is total debt divided by total equity:
2014 2015
Total Debt Ratio ($54355+$77000)/$265256 ($56000+$87000)/$288000
0 .5 0 0.50
Equity Multiplier Ratio
Leverage Multiplier Ratio 1.50 1.50
The equity multiplier ratio is 1 plus the debt-equity ratio:
2014 2015
1+0.50=1.50 1+0.50=1.50
Times Interest Earned (TIE) Ratio 2015
The TIE ratio is EBIT divided by interest:
=88007/15100
=5.83
Cash Coverage Ratio 2015
The cash coverage ratio is EBIT plus depreciation divided by interest:
=(88007+48400)/15100
=9.03
Profitability Ratios:
Net Profit Margin (NPM) Ratio 2015
The NPM ratio is net income divided by net sales:
=$43744/$392907
=11.13
Return On Assets (ROA) 2015
The ROA ratio is net income divided by total assets:
=$43744/$431000
=10.14
Return On Equity (ROE) 2015
The ROE ratio is net income divided by total equity:
=$43744/$288000
=15.19
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.