Question
A firm submits its financial records to a bank. Upon examination, the bank discovers that this firm has $1000 in cash, $5,000 in accounts receivables,
A firm submits its financial records to a bank. Upon examination, the bank discovers that this firm has $1000 in cash, $5,000 in accounts receivables, $2,000 in inventory, and $10,000 in plant and equipment and that their assets totaled $18,000. In addition, this bank discovered that the firm had $4,000 in current liabilities, $5,000 in long-term debt, and $9,000 in net worth. Finally, this bank discovered that this firm had $40,000 in net sales and $4,000 in net income.
Calculate the following
a) Net Profit Margin
b) Gross profit Margin
c) Current ratio
d) Acid test ratio
e) Leverage Ratio
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