Calculate the liquidity ratios and leverage ratios

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Reference no: EM13807482

Income Statement

                                                            FY 2007                    

Sales                                                    1,750,000                  

Labor and Materials                            1,150,000                     

Factory Overhead                                  370,000                  

Selling and General Expenses                260,000                      

Profit Before Taxes                                 (30,000)                     

Taxes                                                                  0                     

Profit                                                       (30,000)                     

Balance Sheet

                                                            Dec 2007                   

Assets

Cash 25,000                     

Accounts Receivables                         350,000                     

Inventories 90,000                     

Plant and Equipment                          190,000

Total Assets                            655,000

Liabilities

Account Payable                                 255,000                     

Notes Payable                                     90,000                      

Long-term Debt                                  10,000                     

Stockholder’s Equity

Capital Stock                                      25,000                     

Retained Earnings                               275,000                      

Total Liabilities & Equity       655,000

Using Income Statement and Balance Sheet figures for 2007, calculate the liquidity ratios and leverage ratios for the company. Show your work. Report and comment on the health of the company as evidenced by each of the following:

Quick Ratio

Current Ratio

Total Debt to Net Worth and

Current Debt to Net Worth.

Reference no: EM13807482

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