SMOLIRA GOLF, INCORPORATED
Balance Sheets as of December 31. 2021 and 2022

Assets                             2021            2022
Current assets
Cash                              $6,358            $7,866
Accounts receivable        9248.             11,445
Inventory.                       14,580            29,641
Total                                $30,186           $48,952

Fixed assets
Net plant and equipment              $90,361  $107,206
Total assets                                 $120,547  $156,158


Liabilities and Owners' Equity
Current liabilities
Accounts payable                          $4880       $5,381
Notes payable                                 3959       4479
Other                                               198            429
Total                                                 9,037    10,289
Long-term debt                             $32,100     $40,000
Owners' equity
Common stock and paid-in surplus. $40,000    $40,000
Accumulated retained earnings        39,410    65,869
Total $79,410 $105,869
Total liabilities and owners' equity    $120,547   $156,158

SMOLIRA GOLF, INC.
2022 Income Statement

Sales $287,318
Cost of goods sold. 220,396
Depreciation 10,913
EBIT $ 56,009
Interest paid  2,264
Taxable income $ 53,745
Taxes 11,286
Net income $ 42,459

Dividends $16,000

Addition to retained earnings. 26,459

Interpreting Financial Ratios After calculating the ratios for Smolira Golf, you have uncovered the following industry ratios for 2022:

Lower Quartile Median Upper Quartile

Current ratio 1.3 2.6 5.3

Total asset turnover 2.1 2.7 4.1

Debt-equity ratio   .23   .50   .60

Profit margin   8.4%   10.2%   13.3%

How is Smolira Golf performing based on these ratios?

Answer rating: 100% (QA)

Based on the industry ratios and the financial statements provided we can analyze Smolira Golfs performance using the following financial ratios Curre... View the full answer