Reference no: EM132583942
Long-term debt ratio=0.3; Times interest earned=8.0; Current ratio=1.4; Quick ratio=1.0; Cash ratio=0.4; Inventory turnover=4.0; Average collection period=73days
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= $200.00
Cost of goods sold=128.00
Selling, general, and administrative expenses=16.00
Depreciation=26.00
Earnings before interest and taxes (EBIT)=$30.00
Interest expense=3.75
Income before tax=$26.25
Tax (35% of income before tax)=9.19
Net income=$17.06
BALANCE SHEET(Figures in $ millions)
This Year Last Year (respectfully)
Assets
Cash and marketable securities= XXX & $26
Accounts receivable= XXX & $40
Inventories= XXX & $32
Total current assets= XXX & $98
Net property, plant, and equipment = XXX & 31
Total assets= XXX & $129
Liabilities and shareholders' equity
Accounts payable$20.00 & $15
Notes payable 30.00 & 35
Total current liabilities XXX & $50
Long-term debt26 Shareholders' equity XXX & 53
Total liabilities and shareholders' equity$175.00 & $129