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Silver Computer Corporation Use the financial statements below to complete a financial ratio analysis. The ratios should be calculated on the ratio worksheet. Make sure

Silver Computer Corporation
Use the financial statements below to complete a financial ratio analysis.
The ratios should be calculated on the ratio worksheet. Make sure to reference
amounts from the statements onto your ratios. Be sure that your answer
uses the correct format for that ratio: times, percentage, days, dollar amount.
Ratio Format:
Show with your answer whether the ratio is times, perentage, or dollar amount.
For example:
o Current ratio is times, so it would be shown as a number compared to one.
(ie. 2.08 to 1 or 2.08:1 )
o Working capital is a dollar amount, so it would be shown as currency.
(ie. $11, 190 )
o Net margin is a percentage, so it would be shown with a % sign.
(ie. 12.7% )
Take a look at the ratio descriptions in the textbook to determine if the ratio is
times, percentage, or dollar amount.
Decimal Places on Ratios
The following are typically accepted rules for decimal places on ratios:
o Ratios: two decimal places
o Dollars: two decimal places (the book showed three decimal places for
earnings per share but we don't need to do that for this class)
o Days: one decimal place
o Percentages: one decimal place (the textbook showed percentages to two
decimal places but I think that is overkill)
o Price-Earnings ratio: two decimal places
o Times: two decimal places
Silver Computer Corporation
Income Statement
For the Year Ended December 31, 2016
Sales $ 47,240
Cost of goods sold 18,920
Gross profit 28,320
Operating expenses
Utilities $ 6,430
Wages 8,310
Rent 1,730 16,470
Operating income 11,850
Other revenue and expense
Interest revenue $ 940
Interest expense 1,190 2,130
Income before income taxes 9,720
Income taxes 3,730
Net income $ 5,990
Silver Computer Corporation
Comparative Balance Sheets
As of December 31, 2016 and 2015
Change
2016 2015 Amount Percent
Assets
Current assets
Cash $ 3,290 $ 6,230 $ (2,940) -47.2%
Marketable securities 1,120 1,920 (800) -41.7%
Accounts receivable 3,980 6,790 (2,810) -41.4%
Merchandise inventory 6,880 5,110 1,770 34.6%
Supplies 1,270 2,130 (860) -40.4%
Total current assets 16,540 22,180 (5,640) -25.4%
Plant and equipment
Equipment 10,560 6,450 4,110 63.7%
Truck 26,310 18,310 8,000 43.7%
Total plant and equipment 36,870 24,760 12,110 48.9%
Total assets $ 53,410 $ 46,940 $ 6,470 13.8%
Liabilities
Current liabilities
Accounts payable $ 6,940 $ 4,390 $ 2,550 58.1%
Wages payable 990 1,510 (520) -34.4%
Accrued liabilities 2,420 1,920 500 26.0%
Total current liabilities 10,350 7,820 2,530 32.4%
Long-term liabilities
Long-term notes payable 9,900 6,300 3,600 57.1%
Total liabilities 20,250 14,120 6,130 43.4%
Stockholder's Equity
Common stock 8,460 6,610 1,850 28.0%
Retained earnings 29,700 26,210 3,490 13.3%
Total stockholder's equity 38,160 32,820 5,340 16.3%
Total liabilities & equity $ 58,410 $ 46,940 $ 11,470 24.4%
Notes for preparation of financial ratios:
o All of Silver Corporations sales were on account.
o 1,692 shares of common stock were outstanding at the end of 2016.
o $2.50 of dividends per share were paid in 2016.
o The market price per share of Silver stock was $34.00 for all of 2016.
Answer this question
Silver Computer Corporation
Liquidity and Solvency Financial Ratios
Liquidity Ratios
Note - Working Capital shown as an example to follow on the remaining ratios.
Working Capital 16,540
10,350 1.6:1
Current ratio
Quick ratio
* Quick assets are cash, marketable securities, and accounts receivable
Accounts receivable turnover
Average days to collect receivables
Inventory turnover
Average days to sell inventory
Operating cycle
Solvency Ratios (Long-term credit risk)
Debt ratio
Interest coverage ratio

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