Question

Can someone help finding the Acid Test Ratio to make sure it is correct, the times interest ratio portion, and the return on net sales all for year one and year 2? I have attached the table along with the questions i think most of my answers are right but I need help.
10 11 Tootsie Roll Industries Inc. 12 Income Statement 13 Total Revenue 14 Product Cost of Goods Sold 15 Rental and Royalty Cost 16 Total Gross Margin 17 Selling, Marketing and Administrative Expenses 18 Earnings from Operations 19 Income Taxes 20 Net Earnings Year 1 518,9201 329,880 867 188,173 117,691 70,482 16,401 56,805 Year 2 519,289 325,924 972 192,393 120,977 71,416 3,907 80,654 Year 3 521,100 320,290 1,019 199,791 107,377 92,414 30,593 67,319 Vertical Analysis Year 1 100.00% 63.57% 0.17% 36.26% 22.68% 13.58% 3.16% 10.95% Vertical Analysis Year 2 100.00% 62.76% 0.19% 37.05% 23.30% 13.75% 0.75% 15.53% Horizontal Analysis Year 3 to 1 0.42% -2.91% 17.53% 6.17% -8.76% 31.12% 86.53% 18.51% 22 Vertical Analysis Year 2 10.35% 4.47% 5.09% 5.90% 29.10% 19.22% 23 Balance Sheet 24 Cash and Cash Equivalents 25 Investments 26 Accounts Receivable Trade 27 Inventory (Add: FG and WIP + RM & supplies lines) 28 Total Current Assets 29 Net Property, Plant and Equipment 30 Goodwill 31 Trademarks 32 Total Assets 33 Accounts Payable 34 Accrued Liabilities 35 Total Current Liabilities 36 Total Noncurrent Liabilities 37 Total liabilities (Add total current liab+total noncurren 38 Common Stock 39 Class B Common Stock 40 Retained Earnings 41 Treasury Stock 42 Total Equity 43 Total liabilities and Shareholders Equity Year 1 110,899 35,714 49,777 51,694 304,046 186,101 73,237 175,024 947,361 11,817 42,849 61,391 135,473 196,864 26,767 17,767 33,767 -1,992 750,622 947,361 Year 2 96,314 41,606 47,354 54,827 270,920 178,972 73,237 175,024 930,946 11,928 45,157 63,788 133,354 197,142 26,361 17,285 57,225 -1,992 733,804 930,946 Year 3 119,145 67,513 42,964 57,531 299,300 180,905 73,237 175,024 920,101 10,320 46,300 63,561 145,002 208,563 26,181 16,820 43,833 -1,992 711,538 920,101 Vertical Analysis Year 1 11.71% 3.77% 5.25% 5.46% 32.09% 19.64% 7.73% 18.47% 100.00% 1.25% 4.52% 6.48% 14.30% 20.78% 2.83% 1.88% 3.56% -0.21% 79.23% 100.00% 7.87% 18.80% 100.00% 1.28% 485.00% 6.90% 14.32% 21.18% 2.83% 1.86% 6.15% -0.21% 78.82% 100.00% Horizontal Analysis Year 3 to 1 7.44% 89.04% -13.69% 11.29% -1.56% -2.79% 0.00% 0.00% -2.88% -12.67% 8.05% 3.53% 7.03% 5.95% -2.19% -5.33% 29.81% 0.00% -5.21% -2.88% 44 45

Answer 1

Please note that times earned ratio could not be calculated as information pertaining to interest expense is not provided.

acid test ratio	quick assets / current liabilities
	Year 1	Year 2
cash and cash equivalent	110899	96314
investments	35714	41606
accounts receivable	49777	47354
total quick assets	196390	185274
total current liabilities	61391	63788
acid-test ratio	3.20	2.90
times interest ratio	earnings before interest and tax / interest expense
	Year 1	Year 2
earnings before interest and tax	70482	71416
interest expense	NA	NA
return on net sales	operating profit / total revenue
	Year 1	Year 2
operating profit	70482	71416
total revenue	518920	519289
return on net sales	13.58%	13.75%