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Case C The following data applies to Big Co. Inc. (in millions of US $): Cash & marketable securities $165 Fixed assets $286 Net sales
Case C The following data applies to Big Co. Inc. (in millions of US $): Cash & marketable securities $165 Fixed assets $286 Net sales $1320 Earnings Before Interests and Taxes (EBIT) $143 Net Earnings After Taxes (NEAT) $ 66 Quick Ratio (CA-InventoryYCL) 2.1 to 1 Current Ratio (CA/CL) 3.4 to 1 Average Collection Period (ACP) 45.60 days Return on Equity (ROE, NEAT/Net Common Equity) 13% Tax rate 25% On the Liabilities & Equity side, BigCo has only common equity, debt and current operating liabilities. Find BigCo's (1) Accounts Receivables, (2) Current Operating Liabilities, (3) Current Assets, (4) Total Assets, (5) Net Common Equity, and (7) Debt. (10 points) b. If BigCo managed to reduce its ACP by 15.60 days (i.e., totaling 30 days) while holding other things constant, how much cash could it generate? (10 points) What is BigCo's ROIC (post-tax)? (10 points) C
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