The financial statements of Sol Company appear below:

Sol COMPANY

Comparative Statements of Financial Position

December 31

Assets 2020 2019

Property, plant and equipment (net).................................................. $330,000 $300,000

Inventory............................................................................................ 80,000 70,000

Accounts receivable (net).................................................................. 50,000 40,000

Short-term investments..................................................................... 45,000 60,000

Cash................................................................................................... 25,000 40,000

Total assets ................................................................................ $530,000 $510,000

Equity and liabilities

Share capital ordinary.................................................................... $180,000 $150,000

Retained earnings.............................................................................. 140,000 70,000

Bonds payable................................................................................... 120,000 160,000

Accounts payable.............................................................................. 20,000 40,000

Short-term notes payable.................................................................. 70,000 90,000

Total equity and liabilities ........................................................... $530,000 $510,000

Sol COMPANY

Income Statement

For the Year Ended December 31, 2020

Net sales............................................................................................ $420,000

Cost of goods sold............................................................................. 240,000

Gross profit........................................................................................ 180,000

Operating expenses........................................................................... 42,000

Income from operations..................................................................... 138,000

Interest expense................................................................................ 18,000

Income before income taxes............................................................. 120,000

Income tax expense.......................................................................... 30,000

Net income........................................................................................ $ 90,000

Additional information:

a. Cash dividends of $20,000 were declared and paid in 2020.

b. Weighted-average number of ordinary shares outstanding during 2020 was 55,000 shares.

c. Market value of ordinary shares on December 31, 2020, was $24 per share.

Instructions

Using the financial statements and additional information, compute the following ratios for Sol Company for 2020. Show all computations.

Liquidity	Computation	2020 Ratio
Current ratio
Acid -test ratio
Accounts receivables turnover
Average collection period in days
Inventory turnover
Days in inventory
Operating Cycle
Profitability
Profit margin
Asset turnover
Return on assets
Return on ordinary shareholders' equity
Earning per share (EPS)
Price earning (PE) ratio
Payout ratio
Solvency
Debt to asset ratio
Times interest earned