A corporation reports the following year-end balance sheet data. Calculate the following ratios:(a) working capital(b) acid-test ratio(c) current ratio(d) debt ratio(e) equity ratio(f) debt-to-equity ratioCash$ 50,000Current liabilities $ 64,000Accounts receivable35,000Long-term liabilities72,000Inventory60,000Common stock100,000Equipment140,000Retained earnings49,000Total assets$285,000Total liabilities and equity$285,000
What will be an ideal response?
| (a) Current assets = ($50,000 + $35,000 + $60,000) | $145,000 |
| Current liabilities | 64,000 |
| Working capital | $81,000 |
| ? | ? |
| (b) Acid-test ratio: | ? |
| ($50,000 + $35,000)/$64,000 = | 1.32 |
| ? | ? |
| (c) Current ratio: | ? |
| $145,000/$64,000 = | 2.27 |
| ? | ? |
| (d) Debt ratio: | ? |
| ($64,000 + $72,000)/$285,000 = | .48 |
| ? | ? |
| (e) Equity ratio: | ? |
| ($100,000 + $49,000)/$285,000 = | .52 |
| ? | ? |
| (f) Debt-to-equity ratio: | ? |
| $136,000/$149,000 = | .91 |
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