Problem : Calculating Financial Ratios
Just Dew It Corporation reports the following balance sheet information for 2014 and 2015.
JUST DEW IT CORPORATION
2014 and 2015 Balance Sheets
| Assets |
|
Liabilities and Owners' Equity |
|
2014 |
|
2015 |
|
|
2014 |
|
2015 |
| Current assets |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
| Cash |
$ |
7,050 |
|
|
$ |
10,600 |
|
|
Accounts payable |
$ |
34,500 |
|
|
$ |
40,600 |
|
| Accounts receivable |
|
25,050 |
|
|
|
28,800 |
|
|
Notes payable |
|
21,150 |
|
|
|
21,800 |
|
| Inventory |
|
55,650 |
|
|
|
72,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
$ |
87,750 |
|
|
$ |
111,600 |
|
|
Total |
$ |
55,650 |
|
|
$ |
62,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
$ |
36,000 |
|
|
$ |
33,000 |
|
|
|
|
|
|
|
|
|
|
Owners' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and paid-in surplus |
$ |
48,000 |
|
|
$ |
48,000 |
|
|
|
|
|
|
|
|
|
|
Retained earnings |
|
160,350 |
|
|
|
256,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net plant and equipment |
$ |
212,250 |
|
|
$ |
288,400 |
|
|
Total |
$ |
208,350 |
|
|
$ |
304,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
300,000 |
|
|
$ |
400,000 |
|
|
Total liabilities and owners' equity |
$ |
300,000 |
|
|
$ |
400,000 |
Based on the balance sheets given for Just Dew It:
a. Calculate the current ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
b. Calculate the quick ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
c. Calculate the cash ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
d. Calculate the NWC to total assets ratio for each year. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
e. Calculate the debt-equity ratio and equity multiplier for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
f. Calculate the total debt ratio and long-term debt ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)