BALANCE SHEET BIG VALLEY ENTERPRISES
Assets				Liabilities and Equity					Income Statement
Cash	$	10			Current Liabilities	$	160			Cash Sales	$	275
Accounts receivable		80			Long-Term Debt		230			Credit sales		500
Inventory		115			Common Stock		75			Operating Expenses		560
Fixed Assets		400			Retained Earnings		140			Depreciation		100
Total	$	605			Total	$	605			Interest		55
										Taxes		30
										Net Income		?

Interest is Big Valley's only fixed cash charge.

Big Valley's market value of equity to book value of debt ratio = 1.5.

Peer Average Ratios
Current Ratio	1.35
Quick Ratio	0.5
Days Sales in Receivables	50
Sales to Working Capital	14
Sales to Fixed Assets	1.8
Times Interest Earned	4
Debt to Asset Ratio	50	%
Return on equity	15	%

Big Valley's current ratio indicates that Big Valley is ________ liquid than the typical firm in the industry, and Big Valley's quick ratio indicates that Big Valley is ________ liquid than the typical firm.

A) more; more

B) more; less

C) less; less

D) less; more

E) similar; similar