Bethesda Mining Company reports the following balance sheet information for 2015
ID: 2802222 • Letter: B
Question
Bethesda Mining Company reports the following balance sheet information for 2015 and 2016.
Based on the balance sheets given for Bethesda Mining, calculate the following financial ratios for each year:
a. Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b. Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c. Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
d. Debtequity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
e. Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
BETHESDA MINING COMPANYBalance Sheets as of December 31, 2015 and 2016 2015 2016 2015 2016 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 29,266 $ 38,098 Accounts payable $ 193,922 $ 201,611 Accounts receivable 58,281 78,639 Notes payable 89,020 140,588 Inventory 133,148 199,946 Total $ 282,942 $ 342,199 Total $ 220,695 $ 316,683 Long-term debt $ 245,000 $ 181,750 Owners’ equity Common stock and paid-in surplus $ 210,000 $ 210,000 Fixed assets Accumulated retained earnings 140,100 172,012 Net plant and equipment $ 657,347 $ 589,278 Total $ 350,100 $ 382,012 Total assets $ 878,042 $ 905,961 Total liabilities and owners’ equity $ 878,042 $ 905,961
Explanation / Answer
a. Current ratio
Current ratio = current assets / current liabilities
b.Quick ratio
Quick ratio = (cash + cash equivalents +short term investments + current recievables) / current libilities
0.34times
c. Cash ratio
Cash ratio = (cash + cash equivalents) / current libilities
d.
debt equity ratio and equity multiplier
debt equity ratio = Total Liabilities / Shareholders' Equity
equity multiplier = Total assets / Shareholders' Equity
e.Total debt ratio
Total debt ratio = Total liabilities / Total assets
Current ratio 2015 220695/282942 0.78 times 2016n 316683/342199 0.92 timesRelated Questions
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