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A comparative balance sheet for Sage Corporation is presented as follows. December 31 Assets 2020 2019 Cash $ 72,730 $ 22,000 Accounts receivable 84,480 68,750
A comparative balance sheet for Sage Corporation is presented as follows.
December 31 | ||||||
Assets | 2020 | 2019 | ||||
Cash | $ 72,730 | $ 22,000 | ||||
Accounts receivable | 84,480 | 68,750 | ||||
Inventory | 182,480 | 191,750 | ||||
Land | 73,480 | 112,750 | ||||
Equipment | 262,480 | 202,750 | ||||
Accumulated Depreciation-Equipment | (71,480 | ) | (44,750 | ) | ||
Total | $604,170 | $553,250 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ 36,480 | $ 49,750 | ||||
Bonds payable | 150,000 | 200,000 | ||||
Common stock ($1 par) | 214,000 | 164,000 | ||||
Retained earnings | 203,690 | 139,500 | ||||
Total | $604,170 | $553,250 |
Additional information:
1. | Net income for 2020 was $129,960. No gains or losses were recorded in 2020. | |
2. | Cash dividends of $65,770 were declared and paid. | |
3. | Bonds payable amounting to $50,000 were retired through issuance of common stock. |
Determine Sage Corporations current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt coverage and cash debt coverage to 2 decimal places, e.g. 0.67.)
Current cash debt coverage | :1 | ||
Cash debt coverage | :1 | ||
Free cash flow | $ |
Comment on its liquidity and financial flexibility.
Sage has poorexcellent liquidity. Its financial flexibility is badgood. |
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