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	$	5,298	$	5,827		Accounts payable	$	3,754	$	3,986
Accounts receivable		7,707		8,477		Notes payable		3,045		3,318
Inventory		12,150		21,956		Other		152		179
Total	$	25,155	$	36,260		Total	$	6,951	$	7,483
						Long-term debt	$	24,700	$	16,000
						Owners’ equity
						Common stock
						and paid-in surplus	$	40,000	$	37,000
Fixed assets						Accumulated retained earnings		28,805		55,189
Net plant and equipment	$	75,301	$	79,412		Total	$	68,805	$	92,189
Total assets	$	100,456	$	115,672		Total liabilities and owners’ equity	$	100,456	$	115,672

SMOLIRA GOLF, INC. 2019 Income Statement
Sales			$	229,854
Cost of goods sold				184,317
Depreciation				8,730
EBIT			$	36,807
Interest paid				1,811
Taxable income			$	34,996
Taxes				7,349
Net income			$	27,647
Dividends	$	16,000
Retained earnings		11,647

Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profit margin, return on assets, and return on equity as a percent.)

Fill in the blanks

2018 2019 Short-term solvency ratios a. Current ratio 3.62 times 4.84 times b. Quick ratio 1.87 times 1.91 times c. Cash ratio 0.76 times 0.78 times Asset utilization ratios d. Total asset turnover times e. Inventory turnover times f. Receivables turnover times Long-term solvency ratios g. Total debt ratio 0.20 times h. Debt-equity ratio 0.25 times i. Equity multiplier 1.25 times j. Times interest earned ratio 20.32 times k. Cash coverage ratio times Profitability ratios l. Profit margin 12.03 % m. Return on assets 23.90 % n. Return on equity 29.99 %

Answer 1

Total asset turnover Sales/Total assets 2019 1.99 times =229854/115672 Inventory turnover Inva Cost of goods sold/Inventory 8.39 times =184317/21956 f. Receivables turnover Sales/Accounts receivables 27.12 times =229854/8477 k. Cash coverage ratio (EBIT + Depreciation)/Interest | 25.14 times = (36807+8730)/1811

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