Current ratio : Current ratio is the ratio which is used to measure a company’s liquidity and it considers current assets and current liabilities. Acid test ratio: Acid test ratio is a ratio which is measures the ability of a company to pay off its current obligations out of near cash or quick assets. Day’s sales uncollected: Day’s sales uncollected imply how much days a company takes to collect its accounts receivables. Inventory turnover: Frequency of a company’s inventory sold or returned is shown by inventory turnover. Day’s sales in inventory: Day’s sales inventory shows the average number of days the company not selling its inventory or holding it before selling. Debt to equity ratio: Debt to equity ratio is a solvency ratio which indicates relative proportion of total liabilities and total equity. Time interest earned: Time interest earned is the ratio which reflects risk of loan repayments of vendors or creditors of with interest. Profit margin ratio: Profit margin ratio shows net income as a percent of sales. This ratio reflects a company’s ability of earning. Total assets turnover ratio: Total assets turnover ratio is the measurement of a company’s revenue or sales to its value of total assets. Return on total assets ratio : Measurement of a company’s earnings against its net assets is known as return on total assets ratio. Return on common stockholder’s equity: Return on common stockholder’s equity displays returns received on stockholder’s equity for a certain period of time. To compute: (1) current ratio, (2) acid test ratio, (3) day’s sales uncollected, (4) inventory turnover (5) day’s sales in inventory (6) debt to equity ratio (7) time interest earned (8) profit margin ratio (9) total assets turnover ratio (10) return on total assets ratio (11) return on common stockholder’s equity of S Company.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 4PSB

To determine

Current ratio:

Current ratio is the ratio which is used to measure a company’s liquidity and it considers current assets and current liabilities.

Acid test ratio:

Acid test ratio is a ratio which is measures the ability of a company to pay off its current obligations out of near cash or quick assets.

Day’s sales uncollected:

Day’s sales uncollected imply how much days a company takes to collect its accounts receivables.

Inventory turnover:

Frequency of a company’s inventory sold or returned is shown by inventory turnover.

Day’s sales in inventory:

Day’s sales inventory shows the average number of days the company not selling its inventory or holding it before selling.

Debt to equity ratio:

Debt to equity ratio is a solvency ratio which indicates relative proportion of total liabilities and total equity.

Time interest earned:

Time interest earned is the ratio which reflects risk of loan repayments of vendors or creditors of with interest.

Profit margin ratio:

Profit margin ratio shows net income as a percent of sales. This ratio reflects a company’s ability of earning.

Total assets turnover ratio:

Total assets turnover ratio is the measurement of a company’s revenue or sales to its value of total assets.

Return on total assets ratio:

Measurement of a company’s earnings against its net assets is known as return on total assets ratio.

Return on common stockholder’s equity:

Return on common stockholder’s equity displays returns received on stockholder’s equity for a certain period of time.

To compute: (1) current ratio, (2) acid test ratio, (3) day’s sales uncollected, (4) inventory turnover (5) day’s sales in inventory (6) debt to equity ratio (7) time interest earned (8) profit margin ratio (9) total assets turnover ratio (10) return on total assets ratio (11) return on common stockholder’s equity of S Company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What is the direct materials quantity variance on these general accounting question?

Cullumber Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2022, the following estimates were made for the year. Department D E K Manufacturing overhead $1,280,000 $1,500,000 $840,000 Direct labour costs $1,600,000 $1,312,500 $472,500 Direct labour hours 105,000 125,000 42,000 Machine hours 420,000 525,000 120,000 The following information pertains to January 2022 for each manufacturing department. Department D E K Direct materials used Direct labour costs $147,000 $132,300 $81,900 $126,000 $115,500 $39,375 Manufacturing overhead incurred $103,950 $128,600 $73,950 Direct labour hours 8,400 11,550 3,675 Machine hours 35,700 47,250 10,380 Your answer is partially correct. Calculate the predetermined overhead rate for each department.…

General Accounting Question