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The 2014 financial statements of Dalmac Energy Inc. follow:

Assume all sales were on credit. On the December 31, 2013, balance sheet, the assets totalled $432,720, common shares were $192,000, and retained earnings were $107,640.

Required

Calculate the following:

(a) Current ratio,

(b) Acid-test ratio,

(c) Days’ sales uncollected,

(d) Merchandise turnover,

(e) Days’ sales in inventory,

(f) Ratio of pledged plant assets to secured liabilities,

(g) Times interest earned,

(h) Profit margin,

(i) Total asset turnover,

(j) Return on total assets, and

(k) Return on common shareholders’ equity.

Analysis Component: Identify whether the ratios calculated above compare favourably or unfavourably to the industry averages in Exhibit18.11.

Assume all sales were on credit. On the December 31, 2013, balance sheet, the assets totalled $432,720, common shares were $192,000, and retained earnings were $107,640.

Required

Calculate the following:

(a) Current ratio,

(b) Acid-test ratio,

(c) Days’ sales uncollected,

(d) Merchandise turnover,

(e) Days’ sales in inventory,

(f) Ratio of pledged plant assets to secured liabilities,

(g) Times interest earned,

(h) Profit margin,

(i) Total asset turnover,

(j) Return on total assets, and

(k) Return on common shareholders’ equity.

Analysis Component: Identify whether the ratios calculated above compare favourably or unfavourably to the industry averages in Exhibit18.11.

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