Reference no: EM132473306
Long-term debt ratio 0.3
Times interest earned 10.0
Current ratio 1.2
Quick ratio 1.0
Cash ratio 0.4 Inventory turnover 3.0
Average collection period 73 days
Question 1: Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.)
INCOME STATEMENT (Figures in $ millions)
Net sales:
Cost of goods sold:
Selling, general, and administrative expenses 20.00
Depreciation 30.00
Earnings before interest and taxes (EBIT):
Interest expense:
Income before tax:
Tax (35% of income before tax):
Net income:
BALANCE SHEET(Figures in $ millions) This Year Last Year
Assets
Cash and marketable securities $30
Accounts receivable $44
Inventories $36
Total current assets $110
Net property, plant, and equipment $35
Total assets $145
Liabilities and shareholders' equity
Accounts payable $35.00 $30
Notes payable $ 40.00 45
Total current liabilities $75
Long-term debt 26
Shareholders' equity 44
Total liabilities and shareholders' equity $195.00 $145