SALEM Corporation Financial Analysis

Background: SALEM Corporation is a manufacturing company that produces and sells electronic gadgets. The company has been in operation for the past five years and has shown steady growth in its revenue and market share. As part of the financial management course at a local business school, students are tasked with analyzing SALEM Corporation's financial statements and calculating various financial ratios to assess its liquidity, solvency, and overall financial health.

Financial Statements: You are provided with SALEM Corporation's latest balance sheet and income statement for the fiscal year ending on December 31, 2023.

Balance Sheet (in millions):

• Total Assets: $150
• Current Assets: $80
• Inventories : $ 20
• Current Liabilities: $40
• Long-Term Debt: $30
• Shareholders' Equity: $70

Income Statement (in millions):

• Operating Income: $25
• Interest Expense: $5
• Net Income: $15

2. Calculate the Current Ratio.
4. Calculate the Quick Ratio.
6. Calculate the Interest Coverage Ratio.
8. Calculate the Debt-to-Asset Ratio.
10. Calculate the Equity Ratio.
12. Calculate the Debt to Equity Ratio.