II. Consider the following financial statements for Smolira Golf, Inc.: A. Calculate the following financial ratios for Smolira Golf, Inc. for each year and analyze whether the company improved or worsened its situation (performance) and why? : a the current liquidity ratio,

b the debt ratio over total assets,

c inventory turnover, collection period of portfolio,

d. supplier payment period,

e. final profit margin on sales,

f. return on equity (ROE), and

g. price-earnings ratio or price-earnings

SMOLIRA GOLF Balance sheets, 2008 and 2009 Assets Liabilities and shareholders' equity 2008 2009 2008 2009 Current assets current liabilities Cash $21,860 $22050 Accounts payable $19,320 522850 accounts receivable 11316 13850 Documents to pay 10000 9000 Inventory 23.084 24 650 Others 9643 11 385 Total $56260 $ 60 550 Total $38963 $43,235 long term debt $75,000 $85,000 Capital of the owners Common Stock and Surplus Paid $25,000 $25,000 Fixed assets Retained eamings 151365 167 840 Not plant and equipment 234 068 260 525 Total $ 176365 $192840 Total liabilities and equity total assets $290,328 $321075 accountant $290,328 $32 1,075 SMOLIRA GOLF, Inc. Income Statement 2009 Sales 5305830 Sales cost 210935 Depreciation 26850 Earnings before interest and taxes $68045 Interest paid 11930 taxable profit $56,115 Taxes (35%) 19640 Net profit $36,475 dividends $20,000 Addition to retained earnings 16 475