Calculate the following financial ratios for the Hokie Corporation using the information given in Table 4 and 2014 information

Question

Table 4
Hokie Corporation Comparative Balance Sheet
For the Years Ending March 31, 2013 and 2014
(Millions of Dollars)
Assets 2013 2014
Current assets:
Cash $2 $10
Accounts receivable 16 10
Inventory 22 26
Total current assets $40 $46
Gross fixed assets: $120 $124
Less accumulated depreciation 60 64
Net fixed assets 60 60
Total assets $100 $106
Liabilities and Owners' Equity
Current liabilities:
Accounts payable $16 $18
Notes payable 10 10
Total current liabilities $26 $28
Long-term debt 20 18
Owners' equity:
Common stock 40 40
Retained earnings 14 20
Total liabilities and owners' equity $100 $106

Hokie had net income of $26 million for 1996 and paid total cash dividends of $20 million to their common stockholders.

current ratio
acid test ratio
debt ratio
long-term debt to total capitalization
return on total assets
return on common equity

Answer 1

Answer:
Current ratio = ($46/$28) = 1.64
Acid test ratio = ($20/$28) = 0.71
Debt ratio = ($46/$106) = 0.43
Long-term debt to total capitalization = ($18/$78) = 0.23
Return on total assets = ($26/$106) = 0.25
Return on common equity = ($26/$60) = 0.43