Given the following financial data, compute: a. Return on equity. b. Quick ratio. c. Long-term debt to
Question:
Given the following financial data, compute:
a. Return on equity.
b. Quick ratio.
c. Long-term debt to equity.
d. Fixed-charge coverage.
Assets: | |
Cash........................................................................................... | $ 2,500 |
Accounts receivable................................................................... | 3,000 |
Inventory................................................................................... | 6,500 |
Fixed assets................................................................................ | 8,000 |
Total assets....................................................................................... | $20,000 |
Liabilities and stockholders’ equity: | |
Short-term debt.......................................................................... | $ 3,000 |
Long-term debt.......................................................................... | 2,000 |
Stockholders’ equity.................................................................. | 15,000 |
Total liabilities and stockholders’ equity......................................... | $20,000 |
Income before fixed charges and taxes........................................... | $ 4,400 |
Interest payments............................................................................. | 800 |
Lease payment................................................................................. | 400 |
Taxes (35 percent tax rate)............................................................... | 1,120 |
Net income (after-taxes).................................................................. | $ 2,080 |
Step by Step Answer:
Fundamentals of Investment Management
ISBN: 978-0078034626
10th edition
Authors: Geoffrey Hirt, Stanley Block