The condensed financial statements of Soule SpA for the years 2019 and 2020 are presented as follows.

Compute the following ratios for 2020 and 2019.
a. Current ratio.
b. Inventory turnover. (Inventory on 12/31/18 was €326.)
c. Profit margin.
d. Return on assets. (Assets on 12/31/18 were €2,100.)
e. Return on ordinary shareholders’ equity. (Equity on 12/31/18 was €960.)
f. Debt to assets ratio.
g. Times interest earned.

Transcribed Image Text:

Soule SpA Statements of Financial Position December 31 2020 2019 € 530 € 510 380 Intangibles and other assets Property, plant, and equipment 420 Investments 10 10 Current assets Prepaid expenses Inventory Accounts receivable (net) Cash and cash equivalents €120 €160 430 390 470 433 330 1,350 360 1,343 €2,310 €2,243 Total assets Equity €1,020 €1,040 393 Non-current liabilities 390 900 Current liabilities 810 Total equity and liabilities €2,310 €2,243 Soule SpA Income Statements For the Years Ended December 31 2020 2019 Sales revenue €4,000 €3,600 Costs and expenses Cost of goods sold Selling and administrative expenses Interest expense 984 895 2,400 2,330 10 20 Total costs and expenses 3,394 3,245 Income before income taxes 606 355 Income tax expense 242 142 Net income € 364 € 213