Question

Some recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 2,941 $ 2,857 Accounts payable $ 2,198 $ 2,690 Accounts receivable 4,722 5,691 Notes payable 1,795 2,206 Inventory 12,658 13,692 Other 99116 Total $20,321 $22,240 Total $ 4,092 $ 5,012 $ 14,200 $16,960 Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings $42,500 $ 42,500 Fixed assets 15,699 39,769 Net plant and equipment $ 56,170 $ 82,001 Total $ 58,199 $ 82,269 Total assets $76,491 $104,241 Total liabilities and owners' equity $ 76,491 $ 104,241

Answer 1

Answer of Part f:

Average Receivable = (Beginning Account Receivable + Ending Accounts Receivable) / 2
Average Receivable = ($4,722 + $5,691) /2
Average Receivable = $5,206.5

Receivable Turnover = Sales / Average Receivable
Receivable Turnover = $189,170 / $5,206.5
Receivable Turnover = 36.33 times

Answer of Part g:

For 2018:

Total Debt Ratio = Total Debt / Total Assets
Total Debt Ratio = $14,200 / $76,491
Total Debt Ratio = 0.1856 or 18.56%

For 2019:

Total Debt Ratio = Total Debt / Total Assets
Total Debt Ratio = $16,960 / $104,241
Total Debt Ratio = 0.1627 or 16.27%

Answer of Part h:

For 2018:

Debt-Equity Ratio = Total Debt / Total Equity
Debt Equity Ratio = $14,200 / $58,199
Debt Equity Ratio = 0.2440 or 24.40%

For 2019:

Debt-Equity Ratio = Total Debt / Total Equity
Debt Equity Ratio = $16,960 / $82,269
Debt Equity Ratio = 0.2062 or 20.62%

Answer of Part i:

For 2018:

Equity Multiplier = Total Assets / Total Stockholders Equity
Equity Multiplier = $76,491 / $58,199
Equity Multiplier = 1.31

For 2019:

Equity Multiplier = Total Assets / Total Stockholders Equity
Equity Multiplier = $104,241 / $82,269
Equity Multiplier = 1.27

Answer of Part j:

For 2019:

Times Interest Ratio = EBIT / Interest Expense
Times Interest Ratio = $56,824 / $1,340
Times Interest Ratio = 42.41