Segment 1C Q4 26. Calculating Financial Ratios [LO2] Find the following financia
ID: 2734569 • Letter: S
Question
Segment 1C Q4
26. Calculating Financial Ratios [LO2] Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate):
Short-term solvency ratios:
a. Current ratio
b. Quick ratio
Asset utilization ratios:
e. Inventory turnover
f. Receivables turnover
Long-term solvency ratios:
g. Total debt ratio
j. Times interest earned ratio
Profitability ratios:
l. Profit margin
m. Return on assets
n. Return on equity
Explanation / Answer
Solution.
Short-term solvency ratios:
a. Current ratio = Current assets / Current liabilities
b. Quick ratio = (Current assets Inventory) / Current liabilities
Asset utilization ratios:
e. Inventory turnover = COGS / Average Inventory
f. Receivables turnover = Net Annual Credit Sales / (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Profitability ratios:
l. Profit margin
m. Return on assets = Sales / Total assets
n. Return on equity = Net income / Total equity
Long-term solvency ratios:
g. Total debt ratio = (Total assets Total equity) / Total assets
j. Times interest earned ratio = EBIT / Interest
Numerical deta missing.