The partial financial statement items below were taken from the financial statements of Calibar Company. This account information can be used to correctly solve each of the ratios below. The information is in alphabetical order.
Accounts payable $5,000 Net sales $100,000
Accounts receivable $18,000 Other current liabilities $4,000
Average common shares outstanding 5,000 Salaries payable $4,000
Cash $8,000 Stockholder’s equity $33,000
Gross profit $38,000 Total assets $66,000
Net income $10,000
Instructions: Compute the following.
a) Current ratio
b) Working capital
c) Earnings per share
d) Debt-to-total-assets ratio
To earn full credit, you must show the formula you are using, show your computations, and explain the meaning of each of your ratio results.