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
K L M N PLEASE

Answer 1

K. Cash coverage ratio is computed as shown below:

= ( EBIT + Depreciation ) / Interest expense

= ( $ 56,824 + $ 5,243 ) / $ 1,340

= 46.32 Approximately

L. Profit margin is computed as follows:

= Net Income / Sales

= $ 36,065 / $ 189,170

= 19.06% Approximately

M. Return on assets is computed as shown below:

= Net Income / Assets

= $ 36,065 / $ 104,241

= 34.60% Approximately

N. Return on equity is computed as shown below:

= Net Income / Equity

= $ 36,065 / $ 82,269
= 43.84% Approximately

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