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Business
Accounting
Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 26,722 $ 64,206 Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 Liabilities and Owners' Equity Current liabilities SMOLIRA GOLF CORPORATION 2021 Income Statement 16,100 28,000 $ 69,100 $ 363,900 $397,901 $ 433,000 $ 29,000 19,122 Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $60,000 $60,000 204,346 223,468 $264,346 $ 397,901 $ 283,468 $ 433,000

Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 26,722 $ 64,206 Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 Liabilities and Owners' Equity Current liabilities SMOLIRA GOLF CORPORATION 2021 Income Statement 16,100 28,000 $ 69,100 $ 363,900 $397,901 $ 433,000 $ 29,000 19,122 Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $60,000 $60,000 204,346 223,468 $264,346 $ 397,901 $ 283,468 $ 433,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Some recent financial statements for Smolira Golf Corporation follow.

Find the following financial ratios for Smolira Golf Corporation (use year-end figures rather than average values where appropriate): (Enter the profitability ratio answers as a percent rounded to 2 decimal places, e.g., 32.16. Round the remaining answers to 2 decimal places, e.g., 32.16.) 

1. 

Long-term Solvency Ratios 2020 2021
Total debt ratio times times
Debt-equity ratio times times
Equity multiplier times times

 

2. 

Times interest earned times
Cash coverage ratio times

 

3. 

Profitability Ratios  
Profit margin %
Return on Assets %
Return on Equity %
Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 16,100 26,722 28,000 $ 64,206 $ 69,100 SMOLIRA GOLF CORPORATION 2021 Income Statement Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 $ 363,900 $ 397,901 $ 433,000 $ 29,000 19,122 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $ 383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $ 28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $ 60,000 $60,000 204,346 223,468 $ 264,346 $ 397,901 $ 283,468 $ 433,000
Transcribed Image Text:Assets Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $333,695 Sales Cost of goods sold Depreciation Taxable income Taxes (24%) 2020 Earnings before interest and taxes Interest paid Net income $24,136 $25,000 13,348 16,100 26,722 28,000 $ 64,206 $ 69,100 SMOLIRA GOLF CORPORATION 2021 Income Statement Dividends Retained earnings SMOLIRA GOLF CORPORATION 2020 and 2021 Balance Sheets 2021 $ 363,900 $ 397,901 $ 433,000 $ 29,000 19,122 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total Total liabilities and owners' equity $ 383,818 257,000 48,300 $78,518 15,200 $ 63,318 15,196 $ 48,122 2020 $24,084 $ 28,000 19,000 11,700 12,471 18,300 $ 55,555 $ 58,000 $78,000 $91,532 2021 $ 60,000 $60,000 204,346 223,468 $ 264,346 $ 397,901 $ 283,468 $ 433,000
Expert Solution
Step 1

Ratio analysis is a technique which is used by the business organizations for the purpose of analyzing the company's financial documents so as to know how efficiently the business is running.

Ratios are mainly classified as:

  • Liquidity ratio
  • Solvency ratio
  • Profitability ratio
  • Coverage Ratio
  • Efficiency ratio

 

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