Problem 3-35 Calculating Financial Ratios [LO 2] Some recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets 2021 SMOLIRA GOLF, INCORPORATED Balance Sheets as of December 31, 2021 and 2022 Liabilities and Owners' Equity Current liabilities 2022 Cash $ 2,957 Accounts receivable Inventory Total $ 20,351 5,711 13,712 $ 22,380 Fixed assets $ 3,001 4,732 12,618 Accounts payable Notes payable Other Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Net plant and equipment $ 54,908 $ 80,473 Total assets $ 75,259 $ 102,853 Total liabilities and owners' equity 2021 $ 2,188 1,785 97 $ 4,070 $ 14,000 $ 41,500 15,689 $ 57,189 $ 75,259 SMOLIRA GOLF, INCORPORATED 2022 Income Statement Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes Net income Dividends Retained earnings $ 188,770 126,903 5,263 $ 56,604 1,360 $ 55,244 19,335 $ 35,909 $ 11,975 23,934 h Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profitability ratios as a percent. Answer is complete but not entirely correct. 2021 2022 Short-term solvency ratios a. Current ratio 5.00 times 4.50 times b. Quick ratio 1.90 times 1.74 times c. Cash ratio 0.74 times 5.95 times Asset utilization ratios d. Total asset turnover e. Inventory turnover f. Receivables turnover 1.84 times 9.25 times 33.05 times Long-term solvency ratios g. Total debt ratio 0.24 h. Debt-equity ratio times 0.32 times 2.07 times i. Equity multiplier 1.32 times 0.00x times 0.00 times j. Times interest earned ratio 41.62 times 0.00 times k. Cash coverage ratio Profitability ratios 1. Profit margin m. Return on assets n. Return on equity 19.02 % 34.93 % 0.00 %
Problem 3-35 Calculating Financial Ratios [LO 2] Some recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets 2021 SMOLIRA GOLF, INCORPORATED Balance Sheets as of December 31, 2021 and 2022 Liabilities and Owners' Equity Current liabilities 2022 Cash $ 2,957 Accounts receivable Inventory Total $ 20,351 5,711 13,712 $ 22,380 Fixed assets $ 3,001 4,732 12,618 Accounts payable Notes payable Other Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Net plant and equipment $ 54,908 $ 80,473 Total assets $ 75,259 $ 102,853 Total liabilities and owners' equity 2021 $ 2,188 1,785 97 $ 4,070 $ 14,000 $ 41,500 15,689 $ 57,189 $ 75,259 SMOLIRA GOLF, INCORPORATED 2022 Income Statement Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes Net income Dividends Retained earnings $ 188,770 126,903 5,263 $ 56,604 1,360 $ 55,244 19,335 $ 35,909 $ 11,975 23,934 h Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profitability ratios as a percent. Answer is complete but not entirely correct. 2021 2022 Short-term solvency ratios a. Current ratio 5.00 times 4.50 times b. Quick ratio 1.90 times 1.74 times c. Cash ratio 0.74 times 5.95 times Asset utilization ratios d. Total asset turnover e. Inventory turnover f. Receivables turnover 1.84 times 9.25 times 33.05 times Long-term solvency ratios g. Total debt ratio 0.24 h. Debt-equity ratio times 0.32 times 2.07 times i. Equity multiplier 1.32 times 0.00x times 0.00 times j. Times interest earned ratio 41.62 times 0.00 times k. Cash coverage ratio Profitability ratios 1. Profit margin m. Return on assets n. Return on equity 19.02 % 34.93 % 0.00 %
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 10SPB: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...
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![Problem 3-35 Calculating Financial Ratios [LO 2]
Some recent financial statements for Smolira Golf, Incorporated, follow.
Assets
Current assets
2021
SMOLIRA GOLF, INCORPORATED
Balance Sheets as of December 31, 2021 and 2022
Liabilities and Owners' Equity
Current liabilities
2022
Cash
$ 2,957
Accounts receivable
Inventory
Total
$ 20,351
5,711
13,712
$ 22,380
Fixed assets
$ 3,001
4,732
12,618
Accounts payable
Notes payable
Other
Total
Long-term debt
Owners' equity
Common stock and paid-in surplus
Accumulated retained earnings
Total
Net plant and equipment
$ 54,908
$ 80,473
Total assets
$ 75,259
$ 102,853
Total liabilities and owners' equity
2021
$ 2,188
1,785
97
$ 4,070
$ 14,000
$ 41,500
15,689
$ 57,189
$ 75,259
SMOLIRA GOLF, INCORPORATED
2022 Income Statement
Sales
Cost of goods sold
Depreciation
EBIT
Interest paid
Taxable income
Taxes
Net income
Dividends
Retained earnings
$ 188,770
126,903
5,263
$ 56,604
1,360
$ 55,244
19,335
$ 35,909
$ 11,975
23,934
h
Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate):
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the
profitability ratios as a percent.
Answer is complete but not entirely correct.
2021
2022
Short-term solvency
ratios
a. Current ratio
5.00
times
4.50
times
b. Quick ratio
1.90
times
1.74
times
c. Cash ratio
0.74
times
5.95
times
Asset utilization ratios
d. Total asset turnover
e. Inventory turnover
f. Receivables turnover
1.84
times
9.25 times
33.05
times
Long-term solvency ratios
g. Total debt ratio
0.24
h. Debt-equity ratio
times
0.32 times
2.07 times
i. Equity multiplier
1.32
times
0.00x times
0.00 times
j. Times interest earned
ratio
41.62
times
0.00 times
k. Cash coverage ratio
Profitability ratios
1. Profit margin
m. Return on assets
n. Return on equity
19.02
%
34.93
%
0.00
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc4bb78fe-bb5b-4d47-9e8a-6f0acb834e7e%2F85974db3-6348-4667-86bc-df1701939853%2F5uhb6gw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 3-35 Calculating Financial Ratios [LO 2]
Some recent financial statements for Smolira Golf, Incorporated, follow.
Assets
Current assets
2021
SMOLIRA GOLF, INCORPORATED
Balance Sheets as of December 31, 2021 and 2022
Liabilities and Owners' Equity
Current liabilities
2022
Cash
$ 2,957
Accounts receivable
Inventory
Total
$ 20,351
5,711
13,712
$ 22,380
Fixed assets
$ 3,001
4,732
12,618
Accounts payable
Notes payable
Other
Total
Long-term debt
Owners' equity
Common stock and paid-in surplus
Accumulated retained earnings
Total
Net plant and equipment
$ 54,908
$ 80,473
Total assets
$ 75,259
$ 102,853
Total liabilities and owners' equity
2021
$ 2,188
1,785
97
$ 4,070
$ 14,000
$ 41,500
15,689
$ 57,189
$ 75,259
SMOLIRA GOLF, INCORPORATED
2022 Income Statement
Sales
Cost of goods sold
Depreciation
EBIT
Interest paid
Taxable income
Taxes
Net income
Dividends
Retained earnings
$ 188,770
126,903
5,263
$ 56,604
1,360
$ 55,244
19,335
$ 35,909
$ 11,975
23,934
h
Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate):
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the
profitability ratios as a percent.
Answer is complete but not entirely correct.
2021
2022
Short-term solvency
ratios
a. Current ratio
5.00
times
4.50
times
b. Quick ratio
1.90
times
1.74
times
c. Cash ratio
0.74
times
5.95
times
Asset utilization ratios
d. Total asset turnover
e. Inventory turnover
f. Receivables turnover
1.84
times
9.25 times
33.05
times
Long-term solvency ratios
g. Total debt ratio
0.24
h. Debt-equity ratio
times
0.32 times
2.07 times
i. Equity multiplier
1.32
times
0.00x times
0.00 times
j. Times interest earned
ratio
41.62
times
0.00 times
k. Cash coverage ratio
Profitability ratios
1. Profit margin
m. Return on assets
n. Return on equity
19.02
%
34.93
%
0.00
%
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