Following are the balance sheet of Faustin Company’s for 2014.

FAUSTIN COMPANY'S
Balance sheet
Assets
Cash $ 14,800
Marketable securities 7,500
Accounts receivable 12,980
Inventory 11,100
Property and equipment 171,000
Accumulated depreciation (12,300 )
Total assets $ 205,080
Liabilities and Stockholders’ Equity
Accounts payable $ 8,120
Current notes payable 3,360
Mortgage payable 4,800
Bonds payable 21,120
Common stock 114,000
Retained earnings 53,680
Total liabilities and stockholders’ equity $ 205,080
The average number of common stock shares outstanding during 2014 was 860 shares. Net income for the year was $15,100.

Required
Compute each of the following. (Round your answers to 2 decimal places.)

a. Current ratio
b. Earnings per share
c. Quick (acid-test) ratio
d. Return on investment %
e. Return on equity %
f. Debt to equity ratio %

Definition : Current assets include cash and cash equivalents, accounts receivable, inventory,marketable securities,and other liquid assets that can be readily converted to cash.

Definition : Current liabilities are a company's debts or obligations that are due within one year, appearing on the company's balance sheet.

Note: Here, in absence of information, mortgage payable and bonds payable are treated as non-current liabilities and marketable securities are treated as current assets.

Here,

Current Assets = Cash (14800) + Marketable Securities (7500) + Accounts Receivable (12980) + Inventory (11100) = $ 46380 (Refer Note).

Current Liabilities = Accounts Payable (8120) + Current Notes Payable (3360) = $11480 (Refer Note).

Current Ratio = 46380/11480 = 4.04

b. Earning Per Share

Earninigs Per Share = Net Income/No. of share outstanding

Earnings Per Share = $15100/860shares = $ 17.56/per share

c. Quick (acid test) ratio

Quick Ratio compares Total amount of cash+marketable securities+accounts receivable to the amount of current liabilities.

Current Liability = $ 11480 (as computed above in point (a.)) (Also refer note in point (a.) above)

Quick Ratio = (14800+7500+12980)/11480 = 3.07

d. Return on Investment

Return on Investment = Net income / cost of investment * 100

Note: The term "cost of investment" does not have a universally or uniformly accepted definition. Some deifinition includes long term debt into consideration while other ignores the same in its calculation. Here, Long Term debt is taken into consideration for the calculation of "cost of investment" in return on investment.

Cost of Investment = Mortgage Payable (4800) + Bonds Payable (21120) + Common Stock (114000) + Retained Earnings (53680) = $193600.

Return on Investment = 15100/193600 * 100 = 7.80%

e. Return on Equity

Return on Equity = Net Income / Shareholders' Equity * 100

Shareholders' Equity = Common Stock (114000) + Retained Earnings (53680) = $ 167680.

Return on Equity = 15100/167680 * 100 = 9.01%

f. Debt to Equity Ratio

Debt Equity Ratio = Total Debt/Shareholders' Equity

Total Debt = Mortgage Debt (4800) + Bond Payable (21120) = $ 25920

Shareholders' Equity = $ 167680. ( as computed above in point (e.))

Debt Equity Ratio = 25920/167680 * 100 = 15.46%