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

(Learning Objective 2) 15–20 min.

White Stone Winery requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2014.

Round all ratios to two decimal places. To answer this question, compute the following ratios for 2014 and 2013:

(a) current ratio,

(b) quick ratio,

(c) debt ratio, and

(d) interest coverage ratio. Round all ratios to two decimal places. Summarize the results of your analysis.

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

Short-Term Investments .................................................................

Accounts Receivable, Net ...............................................................

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

Prepaid Expenses............................................................................

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

Total Current Liabilities ...................................................................

Long-Term Note Payable ................................................................

Income From Operations ................................................................

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

$ 40,000 36,000 150,000 180,000 5,000 572,000 153,000 130,000 175,000 16,000 2014

$ 25,000 22,000 136,000 192,000 4,000 560,000 161,000 165,000 158,000 19,500 2013 AppendixLO1