1.
Short-term solvency ratios:
Current ratio
= Current assets / Current liabilities
Current ratio 2008
= $56,260 / $38,963 = 1.44 times
Current ratio 2009
= $60,550 / $43,235 = 1.40 times
Quick ratio
= (Current assets – Inventory) / Current liabilities
Quick ratio 2008
= ($56,260 – 23,084) / $38,963 = 0.85 times
Quick ratio 2009
= ($60,550 – 24,650) / $43,235 = 0.83 times
Cash ratio
= Cash / Current liabilities
Cash ratio 2008
= $21,860 / $38,963 = 0.56 times
Cash ratio 2009
= $22,050 / $43,235 = 0.51 times
Asset utilization ratios:
Total asset turnover
= Sales / Total assets
Total asset turnover
= $305,830 / $321,075 = 0.95 times
Inventory turnover
= Cost of goods sold / Inventory
Inventory turnover
= $210,935 / $24,650 = 8.56 times

Receivables turnover = Sales / Accounts receivable
Receivables turnover
= $305,830 / $13,850 = 22.08 times
Long-term solvency ratios:
Total debt ratio
= (Total assets – Total equity) / Total assets
Total debt ratio 2008
= ($290,328 – 176,365) / $290,328 = 0.39
Total debt ratio 2009
= ($321,075 – 192,840) / $321,075 = 0.40
Debt-equity ratio
= Total debt / Total equity
Debt-equity ratio 2008
= ($38,963 + 75,000) / $176,365 = 0.65
Debt-equity ratio 2009
= ($43,235 + 85,000) / $192,840 = 0.66
Equity multiplier
= 1 + D/E
Equity multiplier 2008
= 1 + 0.65 = 1.65
Equity multiplier 2009
= 1 + 0.66 = 1.66
Times interest earned= EBIT / Interest
Times interest earned= $68,045 / $11,930 = 5.70 times
Cash coverage ratio
= (EBIT + Depreciation) / Interest

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- Spring '12
- Walton
- Corporate Finance, Ratio, Financial Ratio, Tobin