1. Best Electronics has a quick ratio of 0.53, current liabilities of $7.3 billion,and inventories of $5.2 billion. What is the firm's current ratio?

a. 9.1

b. 1.25

c. 1.95

d. None of the above

2. At the end of the fiscal year, Big Box Depot had account receivables of $1.89 billion on net sales of $8.5 billion. At the same point in time, Lumber Jack Inc. had accounts receivable of $6.3 billion on net sales of $9.2 billion. Each company had cash on hand of $600,000.

a.Calculate the accounts receivable turnover and days' sales outstanding (DSO) for each company.

b.Based solely on these metrics, which company reported stronger financial metrics. Explain.

3. Cisco Systems has total assets of $78 billion, total debt of $63 billion and net sales of $2.5 billion. Its net profit margin for the year is 20%, while the operating profit (EBIT) margin is 30%.

a.Using the information in question 3, calculate the net income.

b.Using the information in question 3, calculate the ROA.

c.Using the information in question 3, calculate the ROE.

4. P&G reported the following information for its fiscal year end: On net sales of $51.4 billion, the company earned net income after taxes of $6.5 billion. It had cost of goods sold of $25.1 billion and EBIT of $9.8 billion.

a.Using the information in question 3, calculate the gross margin

b.Using the information in question 3, calculate the operating margin (EBIT margin)

c.Using the information in question 3, calculate the net profit margin

5.Focusing solely on profits can be dangerous. Explain why shareholder wealth maximization, rather than profit maximization, is a firm's goal?

6. ACME Corp's balance reported that it had $650,000 in liabilities and $275,000 in equity. On the income statement the company had revenues of $867,030 and expenses (excluding depreciation) of $356,240. Depreciation was $103,456 and interest expense of $52,423. Assuming a 40% tax rate, what was the company's return on assets?

7. Last year, MBA companies had account receivable turnover of 15, total asset turnover of 4.5, and total assets of $1,000,000.

a.What was the value of net sales?

a.What was the value of ABC's account receivable?

8. It is commonly believed that the primary objective of senior management for a profit-seeking publicly-traded corporation is to maximize revenues, profits, and marketshare. Explain some of the dangers with CEOs that operate with this rationale.