The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

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Answer 5

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

Answer 6

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

Answer 7

Chapter 3, Problem 26QP

a)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 8

a)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Explanation:

Short-term solvency ratios:

Formula to calculate the current ratio:

Current ratio=Current assetsCurrent liabilities

Compute the current ratio:

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2011=$61,886$46,755=1.32 times

Hence, the current ratio for 2011 is 1.32 times.

Current ratio=Current assetsCurrent liabilitiesCurrent ratio for 2012=$66,645$53,773=1.24 times

Hence, the current ratio for 2012 is 1.24 times.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

Answer 13

b)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 14

b)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate Quick ratio:

Quickratio=(Current assets−Inventory)Current liabilities

Compute the quick ratio:

Quick ratio for 2011=(Current assets−Inventory)Current liabilities=($61,886−$25,392)$46,755=0.78 times

Hence, the quick ratio for 2011 is 0.78 times.

Quick ratio for 2012=(Current assets−Inventory)Current liabilities=($66,645−$27,155)$53,773=0.73 times

Hence, the quick ratio for 2012 is 0.73 times.

Answer 15

b)

Expert Solution

Answer 16

b)

Expert Solution

Answer 17

Expert Solution

Answer 18

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the cash ratio:

Cash ratio=CashCurrent liabilities

Compute the cash ratio:

Cash ratio for 2011=CashCurrent liabilities=$24,046$46,755=0.51 times

Hence, the cash ratio for 2011 is 0.51 times.

Cash ratio for 2012=CashCurrent liabilities=$24,255$53,773=0.45 times

Hence, the cash ratio for 2012 is 0.45 times.

Answer 19

c)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 20

c)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the cash ratio:

Cash ratio=CashCurrent liabilities

Compute the cash ratio:

Cash ratio for 2011=CashCurrent liabilities=$24,046$46,755=0.51 times

Hence, the cash ratio for 2011 is 0.51 times.

Cash ratio for 2012=CashCurrent liabilities=$24,255$53,773=0.45 times

Hence, the cash ratio for 2012 is 0.45 times.

Answer 21

c)

Expert Solution

Answer 22

c)

Expert Solution

Answer 23

Expert Solution

Answer 24

d)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

d)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total asset turnover ratio:

Total asset turnover ratio=SalesTotal assets

Compute the total asset turnover ratio:

Total asset turnover ratio=SalesTotal assets=$366,996$432,379=0.85 times

Hence, the total asset turnover ratio is 0.85 times.

Answer 25

d)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 26

d)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total asset turnover ratio:

Total asset turnover ratio=SalesTotal assets

Compute the total asset turnover ratio:

Total asset turnover ratio=SalesTotal assets=$366,996$432,379=0.85 times

Hence, the total asset turnover ratio is 0.85 times.

Answer 27

d)

Expert Solution

Answer 28

d)

Expert Solution

Answer 29

Expert Solution

Answer 30

e)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

e)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the inventory turnover ratio:

Inventory turnover ratio=Cost of goods soldInventory

Compute the inventory turnover ratio:

Inventory turnover ratio=Cost of goods soldInventory=$253,122$27,155=9.32 times

Hence, the inventory turnover ratio is 9.32 times.

Answer 31

e)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 32

e)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the inventory turnover ratio:

Inventory turnover ratio=Cost of goods soldInventory

Compute the inventory turnover ratio:

Inventory turnover ratio=Cost of goods soldInventory=$253,122$27,155=9.32 times

Hence, the inventory turnover ratio is 9.32 times.

Answer 33

e)

Expert Solution

Answer 34

e)

Expert Solution

Answer 35

Expert Solution

Answer 36

f)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

f)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the receivables turnover ratio:

Receivables turnover ratio=SalesAccounts receivables

Compute the receivables turnover ratio:

Receivables turnover ratio=SalesAccounts receivables=$3,66,996$15,235=24.09 times

Hence, the receivables turnover ratio is 24.09 times.

Answer 37

f)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 38

f)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the receivables turnover ratio:

Receivables turnover ratio=SalesAccounts receivables

Compute the receivables turnover ratio:

Receivables turnover ratio=SalesAccounts receivables=$3,66,996$15,235=24.09 times

Hence, the receivables turnover ratio is 24.09 times.

Answer 39

f)

Expert Solution

Answer 40

f)

Expert Solution

Answer 41

Expert Solution

Answer 42

g)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

g)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

Answer 43

g)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 44

g)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the total debt ratio:

Total debt ratio = (Total assets−Total equity)Total assets

Compute the total debt ratio:

Total debt ratio for 2011 = (Total assets−Total equity)Total assets=($386,581−$259,826)$386,581=0.33 times

Hence, the total debt ratio for 2011 is 0.33 times.

Total debt ratio for 2012 = (Total assets−Total equity)Total assets=($432,379−$283,606)$432,379=0.34 times

Hence, the total debt ratio for 2012 is 0.34 times.

Answer 45

g)

Expert Solution

Answer 46

g)

Expert Solution

Answer 47

Expert Solution

Answer 48

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

Answer 49

h)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 50

h)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the debt-equity ratio:

Debt-equity ratio=Total debtTotal equity

Compute the debt-equity:

Debt-equity ratio for 2011=Total debtTotal equity=$46,755+$80,000$259,286=0.49 times

Hence, the debt-equity ratio for the year 2011 is 0.49 times.

Debt-equity ratio for 2012=Total debtTotal equity=$53,773+$95,000$283,606=0.52 times

Hence, the debt-equity ratio for the year 2012 is 0.52 times.

Note: The total debt is calculated by adding the total-long term debt and total current liabilities.

Answer 51

h)

Expert Solution

Answer 52

h)

Expert Solution

Answer 53

Expert Solution

Answer 54

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the equity multiplier:

Equity multiplier ratio=1+Debt-equity ratio

Compute the equity multiplier ratio for the year 2011:

Equity multiplier ratio for 2011=1+Debt-equity ratio=1+0.49=1.49 times

Hence, the equity multiplier ratio for the year 2011 is 1.49 times.

Equity multiplier ratio for 2012=1+Debt-equity ratio=1+0.52=1.52 times

Hence, the equity multiplier ratio for the year 2012 is 1.52 times.

Answer 55

i)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 56

i)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the equity multiplier:

Equity multiplier ratio=1+Debt-equity ratio

Compute the equity multiplier ratio for the year 2011:

Equity multiplier ratio for 2011=1+Debt-equity ratio=1+0.49=1.49 times

Hence, the equity multiplier ratio for the year 2011 is 1.49 times.

Equity multiplier ratio for 2012=1+Debt-equity ratio=1+0.52=1.52 times

Hence, the equity multiplier ratio for the year 2012 is 1.52 times.

Answer 57

i)

Expert Solution

Answer 58

i)

Expert Solution

Answer 59

Expert Solution

Answer 60

j)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

j)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the times interest earned ratio:

Times interest earned=Earnings before interest and taxesInterest

Compute the times interest earned ratio:

Times interest earned=Earnings before interest and taxesInterest=$81,654$14,300=5.71 times

Hence, the times interest earned is 5.71 times.

Answer 61

j)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 62

j)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the times interest earned ratio:

Times interest earned=Earnings before interest and taxesInterest

Compute the times interest earned ratio:

Times interest earned=Earnings before interest and taxesInterest=$81,654$14,300=5.71 times

Hence, the times interest earned is 5.71 times.

Answer 63

j)

Expert Solution

Answer 64

j)

Expert Solution

Answer 65

Expert Solution

Answer 66

k)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

k)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the cash coverage ratio:

Cash coverage ratio=Earnings before interest and taxes+DepreciationInterest

Compute the cash coverage ratio:

Cash coverage ratio=Earnings before interest and taxes+DepreciationInterest=$81,654+$32,220$14,300=7.96 times

Hence, the cash coverage ratio is 7.96 times.

Answer 67

k)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 68

k)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the cash coverage ratio:

Cash coverage ratio=Earnings before interest and taxes+DepreciationInterest

Compute the cash coverage ratio:

Cash coverage ratio=Earnings before interest and taxes+DepreciationInterest=$81,654+$32,220$14,300=7.96 times

Hence, the cash coverage ratio is 7.96 times.

Answer 69

k)

Expert Solution

Answer 70

k)

Expert Solution

Answer 71

Expert Solution

Answer 72

l)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

l)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the profit margin ratio:

Profit margin=Net incomeSales

Compute the profit margin:

Profit margin=Net incomeSales=$43,780$366,996=0.1193 or 11.93%

Hence, the profit margin is 11.93%.

Answer 73

l)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 74

l)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the profit margin ratio:

Profit margin=Net incomeSales

Compute the profit margin:

Profit margin=Net incomeSales=$43,780$366,996=0.1193 or 11.93%

Hence, the profit margin is 11.93%.

Answer 75

l)

Expert Solution

Answer 76

l)

Expert Solution

Answer 77

Expert Solution

Answer 78

m)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

m)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on assets (ROA):

ROA=Net incomeTotal assets

Compute the Return on assets (ROA):

ROA=Net incomeTotal assets=$43,780$432,379=0.1013

Hence, the return on assets is 0.1013 or 10.13%.

Answer 79

m)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 80

m)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on assets (ROA):

ROA=Net incomeTotal assets

Compute the Return on assets (ROA):

ROA=Net incomeTotal assets=$43,780$432,379=0.1013

Hence, the return on assets is 0.1013 or 10.13%.

Answer 81

m)

Expert Solution

Answer 82

m)

Expert Solution

Answer 83

Expert Solution

Answer 84

n)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

n)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

Answer 85

n)

Summary Introduction

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Answer 86

n)

Expert Solution

Explanation of Solution

Given information:

The balance sheet of the Company SG shows the following information:

The total assets for the year 2011 are $386,581 and for 2012 are $432,379.
The current assets for the year 2011 are $61,886 and for 2012 are $66,645.
The current liabilities for the year 2011 are $46,755 and for 2012 are $53,773.
The total liabilities and equity for the year 2011 are 386,581 and for 2012 are $432,379.
The cash at the beginning and end of the year is $24,046 and $24,255 respectively.
The accounts receivable for the year 2011 and 2012 is $12,448 and $15,235 respectively.
The inventory for the year 2011 and 2012 is $25,392 and $27,155 respectively.
The fixed asset for the year 2011 and 2012 is $324,695 and $365,734 respectively.
The accounts payable for the year 2011 and 2012 is $23,184 and $27,420 respectively.
The other current liabilities for the year 2011 and 2012 are $11,571 and $15,553 respectively.
The notes payable for the year 2011 and 2012 is $12,000 and $10,800 respectively.
The long-term debt for the year 2011 and 2012 is $80,000 and $95,000.
The common stock and paid in surplus for 2011 are $40,000 and for 2012 are $40,000.
The accumulated retained earnings for 2011 are $219,826 and 2012 are $243,606.
The net income is $43,780.
The depreciation is $32,220.
The dividend paid is $20,000.
The cost of goods sold amounts to $253,122.
The sales is $366,996.
The earnings before interest and taxes are $81,654.
The interest paid is $14,300.
The retained earnings are $23,780.
The taxable income is $67,354.

Formula to calculate the Return on equity (ROE):

ROE=Net incomeTotal equity

Compute the Return on equity (ROE):

ROE=Net incomeTotal equity=$43,780$283,606=0.1544

Hence, the return on equity is 0.1544 or 15.44%.

Answer 87

n)

Expert Solution

Answer 88

n)

Expert Solution

Answer 89

Expert Solution

Answer 90

Ch. 3.1 - Prob. 3.1ACQ Ch. 3.1 - Prob. 3.1BCQ Ch. 3.2 - Prob. 3.2ACQ Ch. 3.2 - Name two types of standardized statements and...Ch. 3.3 - What are the five groups of ratios? Give two or...Ch. 3.3 - Given the total debt ratio, what other two ratios...Ch. 3.3 - Turnover ratios all have one of two figures as the...Ch. 3.3 - Profitability ratios all have the same figure in...Ch. 3.4 - Return on assets, or ROA, can be expressed as the...Ch. 3.4 - Return on equity, or ROE, can be expressed as the...

The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

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To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

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Chapter 3 Solutions

The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

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To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

To find: The financial ratios of Company SG. Introduction: The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.

To find: The financial ratios of Company SG.

Introduction:

The process of analysing and calculating the financial ratios in order to assess the performance of the firm and to find the actions that are necessary to improve the firm’s performance is called the ratio analysis.