Altosd Co Balance Sheet At December 31 2013 Assets Cash Acco

Altosd Co Balance Sheet At December 31, 2013 Assets Cash Accounts receivable (net) Property, plant, and equipment (net S 150 200 300 1.100 Total assets Liabilaties and shareholders\' equity Current liabslities Long-term liabilaties Paid-in capital Retained earnings S 450 600 15o 1000 ?202 Total liabilites and shareholders\' equity Selected 2013 income statement information for Altoid Co. includes: Net sales Operating expenses Income before interest and taxes Interest expense Income tax expense Net income $7.700 590 90 350 Required Compute the following financial statement ratios for 2013 Altoid Co.\'s current ratio. Round your answer to two decimal places Altoid Co.\'s acid-test ratio. Round your answer to two decimal places. Altoid Co.\'s debt to equity ratio. Round your answer to two decimal places.

Solution

Answer to Problem 6:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = (Total Assets - Property, Plant and Equipment, net) / Current Liabilities
Current Ratio = ($2,200 - $1,100) / $450
Current Ratio = 2.44

Quick Ratio = (Current Assets - Inventories) / Current Liabilities
Quick Ratio = (Total Assets - Inventories - Property, Plant and Equipment, net) / Current Liabilities
Quick Ratio = ($2,200 - $450 - $1,100) / $450
Quick Ratio = 1.44

Debt to Equity Ratio = Total Liabilities / Total Equity
Debt to Equity Ratio = (Current Liabilities + Long-term Liabilities) / (Paid-in Capital + Retained Earnings)
Debt to Equity Ratio = ($450 + $600) / ($150 + $1,000)
Debt to Equity Ratio = 0.91