ome recent financial statements for Smolira Golf, Inc., follow s as of 2014 31,

Question

ome recent financial statements for Smolira Golf, Inc., follow s as of 2014 31, 2013 and 2014 2013 2013 Liabilities and Owners' Equity 2014 Current assets Current liabilities Cash Accounts receivable Inventory 4,607 4,910 Accounts payable 6,702 8,149 Notes payable 17,357 19,350 Other s 3,413 s3,846 3,416 165 2,768 138 Total $28,666 s 32.409 Total $ 6,319 S 7,427 $22.500 $ 19,000 Long-term debt Owners equity Common stock and paid-in surplus Accumulated retained earnings $38,000 $ 38,000 20.53544.792 Fixed assets Net plant and equipments 58,688 $ 76810 Total $58535 S 82,792 Total assets $87,354 $109.219 Total liabilities and owners' equity $87,354 $ 109.219 SMOLIRA GOLF, INC. 2014 Income Statement S205.227 138,383 5,910 Gost of goods sold EBIT $ 60,934 1,617 5 59,317

Explanation / Answer

Short Term Solvency Ratios Formula 2013 2014 a Current Ratio Current Assets/Current Liabilities 4.54 4.36 28666/6319 32409/7427 b Quick Ratio (Current Assets-Inventory)/Current Liabilities 1.79 1.76 (28666-17357)/6319 (32409-19350)/7427 c Cash Ratio (Cash + Marketable Securities)/Current Liabilities 0.73 0.66 4607/6319 4910/7427 Asset Utilization ratios d Total Assets Turnover Sales/Total Assets 1.88 205277/109219 e Inventory Turnover Cost of Goods Sold/Inventory 7.15 138383/19350 f Receivables Turnover Sales/Accounts Receivable 25.19 205277/8149 Long-Term Solvency Ratios g Total Debt Ratio Debt/Total assets 0.33 0.24 (6319+22500)/87354 (7427+19000)/109219 h Debt-equity ratios Debt/Equity 0.49 0.32 (6319+22500)/58535 (7427+19000)/82792 i Equity Multiplier Total assets/Stockholder's equity 1.49 1.32 87354/58535 109219/82792 j Times Interest earned Ratio Earnings before interest and tax/Interest 37.68 60934/1617 k Cash coverage ratio Cash/Interest 5.04 8149/1617 Profitability Ratios l Profit Margin Net Income/Sales 18.78% 38557/205277 m Return on assets Net Income/Total assets 35.30% 38557/109219 n Return on equity Net Income/Shareholders equity 46.57% 38557/82792

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