Question

Flint Company has been operating for several years, and on December 31, 2020, presented the following balance sheet.

FLINT COMPANY BALANCE SHEET DECEMBER 31, 2020
Cash		$36,700		Accounts payable		$75,200
Receivables		67,600		Mortgage payable		126,700
Inventory		100,500		Common stock ($1 par)		143,800
Plant assets (net)		206,100		Retained earnings		65,200
		$410,900				$410,900

The net income for 2020 was $26,200. Assume that total assets are the same in 2019 and 2020.

(a) Compute each of the following ratios. (Round answers to 2 decimal places, e.g. 1.59 or 45.87%.)

(a)		Current ratio		enter the Current ratio rounded to 2 decimal places
(b)		Acid-test ratio		enter the Acid-test ratio rounded to 2 decimal places
(c)		Debt to assets ratio		enter the Debt to assets ratio in percentages rounded to 2 decimal places	%
(d)		Return on assets		enter the Return on assets in percentages rounded to 2 decimal places	%

Answer 1

a
Current Assets	204800	=36700+67600+100500
/ Current Liabilites	75200
Current ratio	2.72
b
Quick Assets	104300	=36700+67600
/ Current Liabilities	75200
Acid Test ratio	1.39
c
Total Liabilities	201900	=75200+126700
/ Total Assets	410900
Debt to Assets ratio	49.14%
d
Net income	26200
/ Total Assets	410900
Return on Assets	6.38%

Answer 2