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9. A firm has the following financial data: Current assets $600,000 Fixed assets 400,000 Current liabilities 300,000 Inventory 200,000 If inventory increases by $100,000, what
9. A firm has the following financial data: Current assets $600,000 Fixed assets 400,000 Current liabilities 300,000 Inventory 200,000 If inventory increases by $100,000, what will be the impact on the current ratio, the quick ratio, and the net-working-capital-to-total-assets ratio? Show the ratios before and after the changes. BEFORE AFTER Current ratio Quick ratio Net working capital to total assets 10. 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
9. A firm has the following financial data:
Current assets $600,000
Fixed assets 400,000
Current liabilities 300,000
Inventory 200,000
If inventory increases by $100,000, what will be the impact on the current ratio, the quick ratio, and the net-working-capital-to-total-assets ratio? Show the ratios before and after the changes.
BEFORE AFTER
Current ratio
Quick ratio
Net working
capital to total assets
10. 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
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