2. You are the new manager of the Duke Snider Motel. In order to better understand...

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2. You are the new manager of the Duke Snider Motel. In order to better understand the motel's financial situation, you decide to examine the financial statements for the year just ended (20x4). The motel's balance sheet and condensed income statement are as follows: Duke Snider Motel Balance Sheets December 31, 20x4 Assets Current assets: Cash Accounts receivable Inventories Total current assets Property and equipment: Land Building (net) Furniture & Equipemnt (net) Total property and Equipment Total assets Liabilities and owners' equity Current liabilities Long-term liabilities: Note from owner Mortgage payable Total liabilities Owners' equity $95,000 100,000 5,000 200,000 60,000 300,000 80,000 440,000 640,000 210,000 40,000 80,000 330,000 Common stock 100,000 Retained earnings 210,000 Total owners' equity 310,000 Total liabilities and owners 'equity 640,000 Duke Snider Motel Condensed Income Statement For the year ended December 31, 20x4 $1,500,000 Sales Cost of goods sold Operating expenses Contribution margin Undistributed operating expenses Gross operating profit Interest Other non-operating expenses Income before taxes Income tax 200,000 800,000 500,000 125,000 375,000 120,000 162,000 93,000 27,900 65,100 Nit income Q: Calculate the following ratios: 1) Current ratio 2) Acid-test ratio 3) Debt-equity ratio 4) Number of times interest earned ratio 5) Profit margin 2. You are the new manager of the Duke Snider Motel. In order to better understand the motel's financial situation, you decide to examine the financial statements for the year just ended (20x4). The motel's balance sheet and condensed income statement are as follows: Duke Snider Motel Balance Sheets December 31, 20x4 Assets Current assets: Cash Accounts receivable Inventories Total current assets Property and equipment: Land Building (net) Furniture & Equipemnt (net) Total property and Equipment Total assets Liabilities and owners' equity Current liabilities Long-term liabilities: Note from owner Mortgage payable Total liabilities Owners' equity $95,000 100,000 5,000 200,000 60,000 300,000 80,000 440,000 640,000 210,000 40,000 80,000 330,000 Common stock 100,000 Retained earnings 210,000 Total owners' equity 310,000 Total liabilities and owners 'equity 640,000 Duke Snider Motel Condensed Income Statement For the year ended December 31, 20x4 $1,500,000 Sales Cost of goods sold Operating expenses Contribution margin Undistributed operating expenses Gross operating profit Interest Other non-operating expenses Income before taxes Income tax 200,000 800,000 500,000 125,000 375,000 120,000 162,000 93,000 27,900 65,100 Nit income Q: Calculate the following ratios: 1) Current ratio 2) Acid-test ratio 3) Debt-equity ratio 4) Number of times interest earned ratio 5) Profit margin

Answer rating: 100% (QA)

Based on the provided balance sheet and income statement for the Duke Snider Motel lets calculate each of the requested financial ratios 1 Current Rat... View the full answer