Question

Assets 2017 2017 2018 $ Current assets Cash Accounts receivable Inventory 4,000 14.880 61.920 points 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 Current liabilities $ 11,280 Accounts payable $ 39,040 20.400 Notes payable 12.960 90.480 $ 122,160 Total $ 52,000 Long-term debt $ 48,000 $ 48,720 17.280 Total $ 80.800 $ 66,000 $ 36,000 eBook Print Owners' equity Common stock and paid-in s 60.000 surplus Retained earnings 160,000 $ 60.000 318,000 References Net plant and equipment $239,200 $ 357.840 Total $220,000 $378,000 Total assets $320,000 $480,000 Total liabilities and owners' equity $320,000 $480,000 Based on the balance sheets given for Just Dew It: a. Calculate the current ratio for each year. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.18.) b. Calculate the quick ratio for each year. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Calculate the cash ratio for each year. (Do not round Intermediate calculations and round your answers to 2 declmal 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 and 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 and round your answers to 2 declmal places, e.g., 32.10.) 2017 2018 times times times times times times a. Current ratio b. Quick ratio C Cash ratio d. NWC ratio e. Debt-equity ratio Equity multiplier Total debt ratio Long-term debt ratio times times times times

Answer 1

		2017			2018
		Calculation	Answer		Calculation	Answer
a.	Current ratio [ Total current assets / Total current liabilities ]	(80800/52000)	1.55	times	(122160/66000)	1.85	times
b.	Quick ratio [ ( Total current assets - Inventory ) / Total current liabilities ]	(80800-61920)/52000	0.36	times	(122160-90480)/66000	0.48	times
c.	Cash ratio [ Cash / Total current liabilities ]	(4000/52000)	0.08	times	(11280/66000)	0.17	times
d.	NWC ratio [ NWC / Total assets ]	(28800/320000)	9.00%		(56160/480000)	11.70%
e.	Debt-equity ratio [ Total debt / Total owner's equity ]	(100000/220000)	0.45	times	(102000/378000)	0.27	times
	Equity multiplier [ Total assets / Total owner's equity ]	(320000/220000)	1.45	times	(480000/378000)	1.27	times
f.	Total debt ratio [ Total debt / Total assets ]	(100000/320000)	0.31	times	(102000/480000)	0.21	times
	Long-term debt ratio [ Long-term debt / Total assets ]	(48000/320000)	0.15	times	(36000/480000)	0.08	times

Wokring notes :
1.
	2017		2018
Total current assets	80800		122160
(-) Total current liabilities	52000		66000
NWC	28800		56160
2.
	2017		2018
Total current liabilities	52000		66000
(+) Long term debt	48000		36000
Total debt	100000		102000