Question

HW 5(1) (Protecte File Home Insert Page Layout Formulas Data Review View Help Search O PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it i SUBSCRIPTION EXPIRED Most of the features of Excel have been disabled. Reactivate ADDITIONAL INFORMATION If you need to make a quick edit before renewing your subscription, learn more a 177 fx с D 2016 A B Refer to the fiscal 2017 income statement and balance sheet of 1 Mullen, Inc. provided below: 2 3 Mullen, Inc. 4 Balance Sheet 5 As of December 31, 2017 6 Assets: 7 Cash and cash equivalents $454,000 8 Accounts receivable 595,241 9 Inventory 518,543 10 Current Assets 1,567,784 11 12 Property, plant and equipment 1,085,741 13 Less: Accumulated depreciation -388,139 14 Property, plant and equipment-net 697 602 15 Intangible assets 748,545 16 17 Total assets $3.013,931 18 19 Liabilities 20 Accounts payable $452.484 21 Accrued expenses 451,421 $374,585 419,546 548,521 1,342.652 924,652 -297,504 627,148 698,545 $2,668,345 $475,152 373.650 Q1 02 Q3 04 DO NOT USE or delete Ready E Type here to search

Answer 1

Computation of Palios 9. current Partis for year 2017 1.08 for Year 2016 1.07 b. Quick ratio for year 2017 0.72 for year 2016 0.63 C. to tell debt-to-equity ratio for year 2017 2.55 for year 2016 2.49 d. Times in teuest cauned for year 2017 on only) 4.70 for year 2017 Explanation (a). Current Ratio Current Asset current liability 2017 2016 Current Asset 1 $1567784 current liability $1455636 1567784 Current Ratio - Current Asset Current liability 1455636 1.077 I $ 1342659 $ 1249690 ( 1342652 1249690 1.074

Current Patio for 2017 - 1.077 il. 1.08 lument Ratio for 2016 1.074 vie. 1007. current Ratio : The Current ratio is a liquidity ratio that measures a company ability short term obabégatitas Obligations or those dure within one Year. A good current ratio lies between boeg 102 to 2: to Pay (b) Quick ratio = Current Assets Inventories current liabilities 2017 2016 Current Asset less: Inventories $1567784 ( $518543) $1049241 $ 1342 652 ($548521) $794131 Curent liabilities $ 1455636 $1249690 Quick ratio : current - Inventory Assel $1049241 $1455636 $ 794131 $ 1249690 current liability 0.72 0.6354 Com Quick ratio for 2017= Quick ratio for 2016 0.72 0.6354.e. 8063. G Quick ratio : The Quick ratio is liquidity ratio thał measures company's ability to meets itt short term obligation with its most liquid assets - It is also lenown as acid test ratio. Inventory is not easily or Convertible into liquid assets, 30 de ducted. A Good Quicle reetio is for more than I.

(C) To teal Debt-to- Equity Yaho Totul liabilities shareholder's Equity 2017 2016 TO tal liabilities $ 2166258 $ 1904 960 $ 847673 $763 385 Total Stoucholdey's Equity Total Debt-to- - Equity Ratio $1904960 $2166258 $8.47613 $ 763385 2.55S 2.495 2.5ssie. 2.55 Total Debt-to- -Equity Patio for 2017 Total Debt-to - Equity Patio for 2016 is 2.495 1.6.2.49 Total Debt-to-E. Equity Patio ; The debt-to Equity ratio is a financial ratio indicating the relative proportion of shave holder's Equity and debt used to finance Company's assets. This ratio is used in evaluating Company's financial leverage? (d) Times in tevest Cauned = O luating Income + Depreciation In teuest Oleuating Income for 2017= $197038 Depreciation for 2017 $ 90 635 in tevest for 2017 $61200 Times interest earned ($197038+ $90635) $287673 $61200 $61200 Times interest eayned = 4.70 ratio that measures company's ceba ability to meet its It is a coverage debt obligations based on Current income.