Current ratio, quick ratio, debt ratio, times-interest-earned ratio

(Learning Objective 2) 15–20 min.

Selected information from the comparative financial statements of Barcelona Company for the year ending December 31 appears below:

Cash................................................................................................

Accounts Receivable (net) ..............................................................

Inventory.........................................................................................

Total Assets ....................................................................................

Current Liabilities............................................................................

Long-term Debt...............................................................................

Net Credit Sales ..............................................................................

Cost of Goods Sold .........................................................................

Interest Expense .............................................................................

Income Tax Expense .......................................................................

Net Income .....................................................................................

Net Cash Provided by Operating Activities ......................................

$ 70,000 175,000 130,000 1,100,000 140,000 410,000 900,000 600,000 40,000 60,000 120,000 250,000 2014

$ 85,000 200,000 170,000 800,000 110,000 300,000 700,000 530,000 25,000 29,000 85,000 135,000 2013 Requirement 1. Compute the following ratios for 2014 and 2013:

(a) current ratio,

(b) quick ratio,

(c) debt ratio, and

(d) interest coverage ratio.

AppendixLO1