CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 3 Tries remaining1 Marked out
ID: 2333203 • Letter: C
Question
CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 3 Tries remaining1 Marked out of 200 Rag question Profitability, Liquidity, and Solvency Ratios Shannon Corporation gathered the following information from its 2013 financial statements: Net Sales Net Income Cash provided by Operating Activities Expenditures on Property. Plant and Equipment Current Assers Current Liabilities Total Assets 191,000 25,200 46,000 14,000 51,500 27,000 141,000 97,500 Total Liabilites Using the above data, calculate the following (1) return on sales ratio, (2) current ratio, (3) debt-to-total-assets ratio, and (4) free cash flow. (Round return on sales and debt-to-total assets ratios to one decimal point and round current ratio to two decimal points.) Return on Sales Racio Current Ratio Debi-to Total Assets Ranio Free Cash Flow Next page MacBook Air 0 3 4 5 9Explanation / Answer
3)
4)
Formula for Return on Sales Ratio Net income/Sales Net Income $ 25,200.00 Sales $ 191,000.00 Return on Sales Ratio 13.2% Formula for Current ratio Current assets/Current liabilities Current Assets $ 51,500.00 Current Liabilites $ 27,000.00 Current Ratio 1.91 Formula for Debt to Total Assets Ratio Total Assets/Total Liabilites Total Assets $ 141,000.00 Total Liabilites 97500 Debt to Total Assets Ratio 69.1% Calculation of Free Cash Flow Cash Provided by Operating Activites $ 46,000.00 Less: Capital Expenditure $ 14,000.00 (Expenditure on Property ,plant and Equipment Free Cash Flow $ 32,000.00