Problem 3-17 Calculating Financial Ratios [LO2]

Just Dew It Corporation reports the following balance sheet information for 2014 and 2015.

JUST DEW IT CORPORATION 2014 and 2015 Balance Sheets
Assets									Liabilities and Owners Equity
	2014				2015					2014				2015
Current assets									Current liabilities
Cash	$	7,050			$	10,600			Accounts payable	$	34,500			$	40,600
Accounts receivable		25,050				28,800			Notes payable		21,150				21,800
Inventory		55,650				72,200
Total	$	87,750			$	111,600			Total	$	55,650			$	62,400
									Long-term debt	$	36,000			$	33,000
									Owners equity
									Common stock and paid-in surplus	$	48,000			$	48,000
									Retained earnings		160,350				256,600
Net plant and equipment	$	212,250			$	288,400			Total	$	208,350			$	304,600
Total assets	$	300,000			$	400,000			Total liabilities and owners equity	$	300,000			$	400,000

Based on the balance sheets given for Just Dew It:

a.	Calculate the current ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

	2014	2015
Current ratio	times	times

b.	Calculate the quick ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

	2014	2015
Quick ratio	times	times

c.	Calculate the cash ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

	2014	2015
Cash ratio	times	times

d.	Calculate the NWC to total assets ratio for each year. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	2014	2015
NWC ratio	%	%

e.	Calculate the debtequity ratio and equity multiplier for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

	2014	2015
Debt-equity ratio	times	times
Equity multiplier

f.	Calculate the total debt ratio and long-term debt ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

	2014	2015
Total debt ratio	times	times
Long-term debt ratio	times	times