Question

Birtle Corporation reports the following statement of financial position information for 2017 and 2018. Assets 2017 2017 2018 S Current assets Cash Accounts receivable Inventory Total $ 43, 805 16, 843 9, 279 23, 683 42.636 $ 75,598 BIRTLE CORPORATION 2017 and 2018 Statement of Financial Position Liabilities and Owners' Equity 2018 Current liabilities $ 11, 173 Accounts payable $ 41,060 25, 760 Notes payable 16, 157 46, 915 $ 83, 848 Total $ 57, 217 Long-term debt $ 40,000 Owners' equity $ 297, 967 Common stock and paid-in surplus $ 50,000 Retained earnings 200, 428 Total $ 250, 428 $ 381, 815 Total liabilities and owners' equity $ 347, 645 $ 60, 648 $ 35,000 Fixed assets Net plant and equipment $ 272, 047 $ 50,000 236, 167 $ 286, 167 $ 381, 815 Total assets $ 347, 645 Based on the statement of financial position given for Birtle: a. Calculate the current ratio for each year. (Round the final answers to 2 decimal places.) 2017 times 2018 Current ratio times b. Calculate the quick ratio for each year. (Round the final answers to 3 decimal places.) 2017 2018 Quick ratio times times C. Calculate the cash ratio for each year. (Round the final answers to 3 decimal places.) 2017 2018 Cash ratio times times d. Calculate the NWC to total assets ratio for each year. (Round the final answers to 1 decimal place.) 2017 2018 NWC ratio e. Calculate the debt-equity ratio and equity multiplier for each year. (Round the final answers to 2 decimal places.) 2017 2018 times times Debt-equity ratio Equity multiplier f. Calculate the total debt ratio and long-term debt ratio for each year. (Round the final answers to 3 decimal places.) 2017 2018 times times Total debt ratio Long-term debt ratio times times

Answer 1

		2017	2018
a]	Current ratio [Current assets/Current liabilities]	1.32	1.38
		[75598/57217]	[83848/60648]
b]	Quick ratio [(Cash+AR)/Current liabilities]	0.576	0.609
		[(9279+23683)/57217]	[(11173+25760)/60648]
c]	Cash ratio [Cash/Current liabilities]	0.162	0.184
		[9279/57217]	[11173/60648]
d]	NWC to total assets ratio	5.3%	6.1%
		[(75598-57217)/347645]	[(83848-60648)/381815]
e]	Debt equity ratio [Total liabilities/Equity]	0.39	0.33
		[97217/250428]	[95648/286167]
	Equity multiplier [Total assets/Equity]	1.39	1.33
		[347645/250428]	[381815/286167]
f]	Total debt ratio [Total liabilities/Total assets]	0.280	0.251
		[97217/347645]	[95648/381815]
	Long term debt ratio [Long term debt/Total assets]	0.115	0.092
		[40000/347645]	[35000/381815]