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ADDITIONAL INFORMATION 2010 201 1 Total Revenue $500,000.00 $600,000.00 Earnings Before Interest and Taxes (EBIT) $200,000.00 $230,000.00 Interest Expense $98,000.00 $103,000.00 Operating Cash Flows $221,000.00

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ADDITIONAL INFORMATION 2010 201 1 Total Revenue $500,000.00 $600,000.00 Earnings Before Interest and Taxes (EBIT) $200,000.00 $230,000.00 Interest Expense $98,000.00 $103,000.00 Operating Cash Flows $221,000.00 $243,000.00 Cost of Goods Sold $70,000.00 $243,000.00 Using the balance sheet and additional information, calculate the following solvency ratios for GLOBAL Hotel for 2011. a) Solvency ratio b) Debt to equity ratio c) Debt to total assets ratio d) Interest coverage ratio e) Operating cash flows to total liabilities ratio f) Inventory turnover g) Total asset turnover1. The balance sheets of GLOBAL Hotel are shown for the years 2010 and 2011. 2010 2011 Cash $10,000.00 $15,000.00 Short-Term Investments $50,000.00 $70,000.00 Accounts Receivable $20,000.00 $15,000.00 Inventories $30,000.00 $45,000.00 TOTAL CURRENT ASSETS $ 1 10,000.00 $ 1 45,000.00 Equipment and Furniture $1 10,000.00 $1 30,000.00 Building $220,000.00 $220,000.00 Less Accumulated Depreciation $(40,000.00) $(50,000.00) TOTAL NET FIXED ASSETS $290,000.00 $300,000.00 TOTAL ASSETS $400,000.00 $445,000.00 Accounts Payable $15,000.00 $20,000.00 Short-Term Loan $40,000.00 $40,000.00 Accrued Expense Payable $5,000.00 $ 10,000.00 Total Current Liabilities $60,000.00 $70,000.00 Mortgage $80,000.00 $80,000.00 Long-Term Loan $60,000.00 $80,000.00 TOTAL LONG-TERM LIABILITIES $140,000.00 $ 1 60,000.00 TOTAL LIABILITIES $200,000.00 $230,000.00 Common Stock $150,000.00 $150,000.00 Retained Earnings $50,000.00 $65,000.00 TOTAL EQUITY $200,000.00 $215,000.00 TOTAL LIABILITIES AND EQUITY $400,000.00 $445,000.00

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