JUST DEW IT CORPORATION 2014 and 2015 Balance Sheets Assets Liabilities and Owne

Question

JUST DEW IT CORPORATION 2014 and 2015 Balance Sheets Assets Liabilities and Owners Equity 2014 2015 2014 2015 Current assets Current iabilities Cash Accounts receivable S 6,560 16,160 61,280 $ 8,600 22,600 74,600 Accounts payable Notes payable S 51,840 21,600 53,000 23,600 S 84,000 S 73,440 S 32,000 40,000 S 76,600 30,000 S 40,000 Total $105,800 Total Long-term debt Owners' equity Common stock and paid-in surplus 174,560 $214,580 $320,000 253,400 $293,400 400,000 earnings Net plant and equipment $236,0 00 $294,200 Total Total assets 320,000 400,000 Total liabilities and owners' equity Based on the balance sheets given for Just Dew It a. Calculate the current ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) 2014 2015 Current ratio 1.14 times 1.38 times b. Calculate the quick ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) 2014 2015 Quick ratio 0.31 times 0.41 times c. Calculate the cash ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) 2014 2015 Cash ratio 0.09 times 0.11 times d. Calculate the NWC to total assets ratio for each year. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 2014 2015 NWC ratio 3.30 | % 7.30 | 96 e. Calculate the debt-equity ratio and equity multiplier for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) 2014 Debt-equity ratio Equity multiplier times times f. Calculate the total debt ratio and long-term debt ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) 2014 2015 Total debt ratio times imes Long-term debt ratio times times

Explanation / Answer

Debt equity ratio = Debt/equity

For 2014 :32000/214560

=0.1491

For 2015 : 30000/293400

=0.1022

Equity multiplier = Total asset/Stockholder's equity

For 2014 = 320000/214560

=1.491

For 2015 = 400000/293400

=1.36

Debt ratio =Total Liability/Asset

For 2014 = 105440/320000

=0.3295

For 2015 = 106600/400000

=0.2665

Long term debt ratio= Long term debt/Total asset

For 2014 = 32000/320000

=0.1

For 2015 = 30000/400000

=0.075

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