Question

Bethesda Mining Company reports the following balance sheet information for 2018 and 2019. BETHESDA MINING COMPANY Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 40,010 $ 51,181 Accounts payable $ 191,922 $ 199,611 Accounts receivable 60,281 80,639 Notes payable 87,020 138,588 Inventory 128,441 194,689 Total $ 278,942 $ 338,199 Total $ 228,732 $ 326,509 Long-term debt $ 241,000 $ 177,750 Owners’ equity Common stock and paid-in surplus $ 214,000 $ 214,000 Accumulated retained earnings 152,537 186,038 Fixed assets Net plant and equipment $ 657,747 $ 589,478 Total $ 366,537 $ 400,038 Total assets $ 886,479 $ 915,987 Total liabilities and owners’ equity $ 886,479 $ 915,987 Calculate the following financial ratios for each year: a. Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d. Debt-equity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) e. Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Next Visit question mapQuestion 4 of 8 Total 4 of 8 Prev

Bethesda Mining Company reports the following balance sheet information for 2018 and 2019.

BETHESDA MINING COMPANY Balance Sheets as of December 31, 2018 and 2019
		2018			2019				2018			2019
Assets							Liabilities and Owners’ Equity
Current assets							Current liabilities
Cash	$	40,010		$	51,181		Accounts payable	$	191,922		$	199,611
Accounts receivable		60,281			80,639		Notes payable		87,020			138,588
Inventory		128,441			194,689
							Total	$	278,942		$	338,199
Total	$	228,732		$	326,509
							Long-term debt	$	241,000		$	177,750
							Owners’ equity
							Common stock and paid-in surplus	$	214,000		$	214,000
							Accumulated retained earnings		152,537			186,038
Fixed assets
Net plant and equipment	$	657,747		$	589,478		Total	$	366,537		$	400,038
Total assets	$	886,479		$	915,987		Total liabilities and owners’ equity	$	886,479		$	915,987

Calculate the following financial ratios for each year:
a.	Current ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b.	Quick ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c.	Cash ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
d.	Debt-equity ratio and equity multiplier. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
e.	Total debt ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Next Visit question map

Question4of8Total4 of 8

Prev

Answer 1

	2019	2018
Current ratio	= current assets/current liabilities
	=326509/338199	=228732/278942
	0.97	0.82
Quick Ratio	= quick assets/current liabilities
	=(current assets-inventories)/current liabilities
	=(326509-194689)/338199	=(228732-128441)/278942
	0.39	0.36
Cash Ratio	= Cash/current liabilities
	=51181/338199	=60281/338199
	0.15	0.18
Debt equity ratio	= total debt/total equity
	=long term debt + current liabilities/total equity
	=(177750+338199)/400038	=(241000+278942)/366537
	1.29	1.42
Equity multiplier	= Total assets/Total equity
	=915987/400038	=886479/366537
	2.29	2.42
Total debt ratio	=total liabilities/total assets
	=(long term debt+current liabilities)/total assets
	=(177750+338199)/915987	=(241000+278942)/886479
	0.56	0.59