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Some recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2009 and 2010 2009 2010 2009 2010 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 3,061 $ 3,057 Accounts payable $ 2,178 $ 2,650 Accounts receivable 4,742 5,731 Notes payable 1,775 2,166 Inventory 12,578 13,732 Other 95 112 Total $ 20,381 $ 22,520 Total $ 4,048 $ 4,928 Long-term debt $ 12,900 $ 15,660 Owners’ equity Common stock and paid-in surplus $ 40,500 $ 40,500 Fixed assets Accumulated retained earnings 15,679 39,477 Net plant and equipment 52,746 78,045 Total $ 56,179 $ 79,977 Total assets $ 73,127 $ 100,565 Total liabilities and owners’ equity $ 73,127 $ 100,565 SMOLIRA GOLF, INC. 2010 Income Statement Sales $ 188,370 Cost of goods sold 126,703 Depreciation 5,283 EBIT $ 56,384 Interest paid 1,380 Taxable income $ 55,004 Taxes 19,251 Net income $ 35,753 Dividends $ 11,955 Retained earnings 23,798 Required: Construct the Du Pont identity for Smolira Golf. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).) Profit margin % Total asset turnover Equity multiplier Return on equity %

Next: SDJ, Inc., has net working capital of $2,010, current liabilities of $5,570, and inventory of $1,255. Requirement 1: What is the current ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 3.16).) Current ratio times Requirement 2: What is the quick ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 3.16).) Quick ratio times Explanation: 1. To find the current assets, we must use the net working capital equation. Doing so, we find: NWC = Current assets – Current liabilities $2,010 = Current assets – $5,570 Current assets = $7,580 Now, use this number to calculate the current ratio and the quick ratio. The current ratio is: Current ratio = Current assets / Current liabilities Current ratio = $7,580 / $5,570 Current ratio = 1.36 times 2. And the quick ratio is: Quick ratio = (Current assets – Inventory) / Current liabilities Quick ratio = ($7,580 – 1,255) / $5,570 Quick ratio = 1.14 times
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Some recent financial statements for Smolira Golf, Inc., follow.

SMOLIRA GOLF, INC.
Balance Sheets as of December 31, 2009 and 2010
   2009  2010    2009  2010
Assets Liabilities and Owners’ Equity
  Current assets     Current liabilities    
     Cash$ 3,061$ 3,057    Accounts payable$ 2,178$ 2,650  
     Accounts receivable  4,742  5,731    Notes payable  1,775  2,166  
     Inventory  12,578  13,732    Other  95  112  
 



  



        Total$ 20,381$ 22,520       Total$ 4,048$ 4,928  
 



  



      Long-term debt$ 12,900$ 15,660  
      Owners’ equity    
         Common stock    
            and paid-in surplus$ 40,500$ 40,500  
  Fixed assets        Accumulated retained earnings  15,679  39,477  
       



      Net plant and equipment  52,746  78,045        Total$ 56,179$ 79,977  
 



  



  Total assets$ 73,127$ 100,565 Total liabilities and owners’ equity$ 73,127$ 100,565  
 







  









SMOLIRA GOLF, INC.
2010 Income Statement
  Sales  $ 188,370  
  Cost of goods sold    126,703  
  Depreciation    5,283  
   

  EBIT  $ 56,384  
  Interest paid    1,380  
    

  Taxable income  $ 55,004  
  Taxes    19,251  
    

  Net income  $ 35,753  
    



     Dividends$ 11,955    
     Retained earnings  23,798    


Required:
Construct the Du Pont identity for Smolira Golf. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).)
 
  Profit margin %
  Total asset turnover 
  Equity multiplier 
  Return on equity %

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