Question
Hello, based off this data below I'm wondering if it's possible to get the short-term and long-term solvency ratios. Assets Cash $65,000.00 Deposits $2,500.00 Equipment
Hello, based off this data below I'm wondering if it's possible to get the short-term and long-term solvency ratios.
Assets
Cash $65,000.00
Deposits $2,500.00
Equipment $16,400.00
Accumulated Depreciation $(466.66)
Inventory $1,597.22
Prepaid Exp. $1,418.00
Total assets : $ 86,448.56
Liabilities
Taxes Payable$0.00
Loans$30,000.00
Total Liabilities: $30,000
Equity
Retained Earnings $56,194.56
Total Equity $56,194.56
Total Liab. & Eq. $81,194.56
So whats confusing me is, I'm using the total liabilities value ($ 30000) to calculate the short-term solvency and long-term solvency ratios; as shown below.
Currents Assets/Current Liabilities = Short-term solvency
$ 86,448.56/$ 30000 = 2.88
Debt/Owners' Equity = Debt-to-Equity Ratio (Long-term solvency)
$ 30000/$ 56194.56 = 0.53
I believe the current liabilities and debt values should be different but I'm unsure of what values to use for them.
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