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ID: 2784007 • Letter: A

Question

a search é eztornhedication.com.hnt px Most VisitedGeting Started My USC Aiken Bic The Trwe Story oft Poc. Some recent financial statements for Smolra Golf, Inc, follow SMOLIRA GOLF, INC Balance Sheets as of December 31, 2015 and 2016 Luablites and Owners Equity Current assets Current labiities $2.183 2,660 2,176 S 3,031 3007 5,721 13,722 $20.366 $ 22,450 Accounts payable Cash Accounts receivable 4,737 12.598 1,780 96 Other Total Long term debt Owners' equity $ 4,059 4,949 $13.900 $16.660 Total S41,000 $ 41,000 39,550 356684 5 80,550 574,643 $102,159 Common stock and paid-in surplus Accumuialed relained earnings 15 684 Fxed assels Net plant and equipment Total assets $54 277 S 9 709 Total 74,643 $102,159 Total liabiltes and owners equity SMOUIRA GOLF, INC 16 Income Statement $189,570 125,803 5,273 $ 58 494 1,370 Cost of goods sold EBIT Inlerest paid Taxable income Tanes Net income 19.293 $ 35,831 $ 11,955 23,866 Retained earnings calculations and round your answers to 2 decmai places·9-32 Find the folowing financial ratios for Smolira Enter the profitability ratios as a percent.) Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate Shoet-term solvency ratios a Current ratio b Quick ratio Cash ratio imes imes 039 P /20172

Explanation / Answer

Answer a.

Current Ratio = Current Assets / Current Liabilities

2015:

Current Ratio = $20,366 / $4,059
Current Ratio = 5.02 times

2016:

Current Ratio = $22,450 / $4,949
Current Ratio = 4.54 times

Answer b.

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

2015:

Quick Ratio = ($20,366 - $12,596) / $4,059
Quick Ratio = 1.91 times

2016:

Quick Ratio = ($22,450 - $13,722) / $4,949
Quick Ratio = 1.76 times

Answer c.

Cash Ratio = Cash / Current Liabilities

2015:

Cash Ratio = $3,031 / $4,059
Cash Ratio = 0.75 times

2016:

Cash Ratio = $3,007 / $4,949
Cash Ratio = 0.75 times

Answer d.

Total Asset Turnover = Sales / Total Assets

2016:

Total Asset Turnover = $188,570 / $102,159
Total Asset Turnover = 1.85 times

Answer e.

Inventory Turnover = Sales / Inventory

2016:

Inventory Turnover = $188,570 / $13,722
Inventory Turnover = 13.74 times

Answer f.

Receivable Turnover = Sales / Receivable

2016:

Receivable Turnover = $188,570 / $5,721
Receivable Turnover = 32.96 times

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