Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 26,722 $ 64,206 Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 Liabilities and Owners' Equity Current liabilities SMOLIRA GOLF CORPORATION 2021 Income Statement 16,100 28,000 $ 69,100 $ 363,900 $397,901 $ 433,000 $ 29,000 19,122 Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $60,000 $60,000 204,346 223,468 $264,346 $ 397,901 $ 283,468 $ 433,000
Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 26,722 $ 64,206 Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 Liabilities and Owners' Equity Current liabilities SMOLIRA GOLF CORPORATION 2021 Income Statement 16,100 28,000 $ 69,100 $ 363,900 $397,901 $ 433,000 $ 29,000 19,122 Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $60,000 $60,000 204,346 223,468 $264,346 $ 397,901 $ 283,468 $ 433,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Some recent financial statements for Smolira Golf Corporation follow.
Find the following financial ratios for Smolira Golf Corporation (use year-end figures rather than average values where appropriate): (Enter the 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.)
1.
| Long-term Solvency Ratios | 2020 | 2021 |
| Total debt ratio | times | times |
| Debt-equity ratio | times | times |
| Equity multiplier | times | times |
2.
| Times interest earned | times |
| Cash coverage ratio | times |
3.
| Profitability Ratios | |
| Profit margin | % |
| Return on Assets | % |
| Return on Equity | % |
Transcribed Image Text:Assets
Current assets
Cash
Accounts receivable
Inventory
Total
Total assets
Fixed assets
Net plant and equipment $333,695
Sales
Cost of goods sold
Depreciation
Taxable income
Taxes (24%)
2020
Earnings before interest and
taxes
Interest paid
Net income
$24,136 $25,000
13,348 16,100
26,722 28,000
$ 64,206 $ 69,100
SMOLIRA GOLF CORPORATION
2021 Income Statement
Dividends
Retained earnings
SMOLIRA GOLF CORPORATION
2020 and 2021 Balance Sheets
2021
$
363,900
$ 397,901 $ 433,000
$ 29,000
19,122
Liabilities and Owners' Equity
Current liabilities
Accounts payable
Notes payable
Other
Long-term debt
Owners' equity
Common stock and paid-in surplus
Accumulated retained earnings
Total
Total
Total liabilities and owners' equity
$ 383,818
257,000
48,300
$78,518
15,200
$ 63,318
15,196
$ 48,122
2020
$24,084 $ 28,000
19,000
11,700
12,471 18,300
$ 55,555 $ 58,000
$78,000 $91,532
2021
$ 60,000 $60,000
204,346 223,468
$ 264,346
$ 397,901
$
283,468
$
433,000
Expert Solution
Step 1
Ratio analysis is a technique which is used by the business organizations for the purpose of analyzing the company's financial documents so as to know how efficiently the business is running.
Ratios are mainly classified as:
- Liquidity ratio
- Solvency ratio
- Profitability ratio
- Coverage Ratio
- Efficiency ratio
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