(Calculation of ratios, LO 5) Below is a simplified balance sheet for Summerside Inc.

(Summerside):

Required:
Calculate the following on December 31, 2014, using Summerside’s balance sheet.
Explain what each amount tells you.

a. working capital

b. current ratio

c. debt-to-equity ratio

Transcribed Image Text:

Summerside Inc. Balance Sheet As at December 31, 2014 Assets Current assets Liabilities and shareholders' equity $1,125,000 Current liabilities $875,000 Non-current assets 3,125,000 Non-current liabilities 1,250,000 Shareholders' equity 2,125,000 Total assets $4,250,000 Total liabilities and shareholders' equity $4,250,000