Following is the balance sheet of Solomon Company for 2018: SOLOMON COMPANY Bala

Question

Following is the balance sheet of Solomon Company for 2018: SOLOMON COMPANY Balance sheet Assets Cash Karketable securities Accounts receivable Inventory Property and equipment Accumulated depreciation Total assets $ 14,800 7,540 13,340 10,650 174,000 (12,500) - $207,730 Liabilities and Stockholders Equity Accounts payable Current notes payable Mortgage payable Bonds payable $ 8,000 3,640 4,600 21,960 113,900 55,630 Common stock Retained earnings Total liabilities and stockholders equity 207,730 The average number of common stock shares outstanding during 2018 was 880 shares. Net Income for th e year was $14,900 Required Compute each of the following:(Round your answers to 2 decimal places.) aCurrent ratio 3.98 b. Eanings per share c. Quick (acid-test) ratio d. Return on investment e. Return on equity f. per share 3.07 22 531% Debt to equity ratio

Explanation / Answer

Cuurent Ratio Current Asset /Current Liabilities 3.98 =+(14800+7540+13340+10650)/(8000+3640) 3.98 Earning Per Share Net Income/No of Share outstanding 16.93 =14900/880 16.93 Quick Ratio (Current Asset-Inventory)/Current Liabilities 3.07 =+(14800+7540+13340)/(8000+3640) 3.07 Return on Investment Net income/Capital employed 7.60% =14900/(55630+113900+21960+4600) 7.60% Return on Equity Net income/Shareholder equity 8.79% =14900/(55630+113900) 8.79% Debt to equity Ratio Debt / Equity 22.53% =+(8000+3640+4600+21960)/(113900+55630) 22.53%

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