CLICK HERE TO REVIEW LEARNING OBJECTIVES Incorrect 0.00 points out of 4.00 Flag

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CLICK HERE TO REVIEW LEARNING OBJECTIVES Incorrect 0.00 points out of 4.00 Flag question QUESTION4 Question text Profitability, Liquidity, and Solvency Ratios Shannon Corporation gathered the following information from its 2013 financial statements: Net Salas Net Income Cash provided by Operating Activities Expenditures on Property, Plant and Equipment 14,000 $189,000 25,200 44,000 Current Assets Current Liabilies Total Assets Total Liabisties 49,500 27,000 139,000 97,500 Usina he ahove cath Cabeaolowm(eumaon sales ato c0 Caai asets rate t ratio, (3) debt to-total assets ratio, and (4) free cash flow (Round return on sales and debt-to-total asset (Round relurn Using the above data, calculate the following (1) r ratios to one decimal point and round current ratio to two decimal points) Return on Sales Ratio Answer . 1.8 Current Ratio Debt-to Total Assets Ratio nsw Free Cash Flow CLICK HERE TO REVIEW LEARNING OBJECTIVES

Explanation / Answer

Return on sales ratio = Net income / Net sales = $25,200 / $189,000 = 13.3%

Current ratio = Current assets - Current liabilities = $49,500 - $27,000 = $22,500

Debt to total assets ratio = Total liabilties / Total assets = $97,500 / $139,000 = 70.1%

Free cash flow = Cash provided by operating activities - Capital expenditure = $44,000 - $14,000 = $30,000

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