VitalSource Bookshelf: Horngren's Accounting eBook - Google Chrome online.vitalsource.com/reader/books/9781486021154/pageid/837 WIN'S COMPANIES PTY LTD alance sheet as at 31 May 2016 and 2015 Assets 2016 2015 Liabilities 2016 2015 Cash $ 2 000 000 $ 900 000 Total current liabilities $33 000 000 $13 100 000 Short-term investments 28 000 000 9 000 000 Non-current liabilities 12 300 000 10 600 000 Accounts receivable 7 400 000 5 300 000 Total liabilities $45 300 000 $23 700 000 Inventory 6 900 000 8 200 000 Shareholders' equity Other current assets 10 000 000 1 800 000 Share capital $11 000 000 $11 000 000 Total current assets $54 300 000 $25 200 000 Retained earnings 32 000 000 16 500 000 All other assets 34 000 000 26 000 000 Total equity $43 000 000 $27 500 000 Total assets $88 300 000 $51 200 000 Total liabilities and equity $88 300 000 $51 200 000 Requirements 1 Calculate Win's Companies' current ratio at 31 May 2016 and 2015. 2 Did Win's Companies' current ratio improve, deteriorate or hold steady during 2016? $18-6 Calculating inventory, gross profit and receivables ratios LO 4 Use the Win's Companies Pty Ltd data in Starter 18-5 to complete the following requirements. Requirements 1 Calculate the rate of inventory turnover, days in inventory and gross profit percentage for 2016. 2 Calculate days' sales in average receivables during 2016. Round dollar amounts to three decimal places. $18-7 Measuring ability to pay liabilities LO 4 Use the financial statements of Win's Companies Pty Ltd in Starter 18-5. Requirements 1 Calculate the debt ratio and the debt to equity ratio at 31 May 2016. 2 Is Win's ability to pay its liabilities strong or weak? Explain your reasoning. $18-8 Measuring profitability LO 4 Use the financial statements of Win's Companies Pty Ltd in Starter 18-5 to complete the following profitability measures for 2016. Requirements 1 Calculate the rate of return on net sales. 2 Calculate the rate of return on total assets. 3 Calculate the asset turnover ratio. 4 Calculate the rate of return on ordinary shareholders' equity. 5 Are these rates of return strong or weak? Explain your reasoning