Assume you are given the following relationships for the Haslam Corporation:

Sales/total assets

1.8

Return on assets (ROA)

4%

Return on equity (ROE)

9%

1.Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places.

2.Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.

3.Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.

% Debt-to-assets ratio = Total debt/total assets

CURRENT AND QUICK RATIOS

The Nelson Company has $935,000 in current assets and $425,000 in current liabilities. Its initial inventory level is $212,500, and it will raise funds as additional notes payable and use them to increase inventory.

1.How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.5? Round your answer to the nearest cent.

$

2.What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

TIMES-INTEREST-EARNED RATIO

The Morris Corporation has $400,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are $2 million, its average tax rate is 30%, and its net profit margin on sales is 4%. If the company does not maintain a TIE ratio of at least 3 to 1, its bank will refuse to renew the loan and bankruptcy will result. What is Morris's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.