Question
Company: GHI Manufacturing Financial Data for 2023 (in $000): Item Amount Cash 50,000 Accounts Receivable 45,000 Inventory 40,000 Prepaid Expenses 15,000 Total Current Assets 150,000
Company: GHI Manufacturing
Financial Data for 2023 (in $000):
Item | Amount |
Cash | 50,000 |
Accounts Receivable | 45,000 |
Inventory | 40,000 |
Prepaid Expenses | 15,000 |
Total Current Assets | 150,000 |
Property, Plant & Equipment | 250,000 |
Total Assets | 400,000 |
Accounts Payable | 50,000 |
Short-term Debt | 30,000 |
Other Current Liabilities | 20,000 |
Total Current Liabilities | 100,000 |
Long-term Debt | 150,000 |
Equity | 150,000 |
Total Liabilities and Equity | 400,000 |
Income Statement for 2023 (in $000):
Item | Amount |
Sales | 600,000 |
Cost of Goods Sold | 350,000 |
Gross Profit | 250,000 |
Operating Expenses | 120,000 |
Interest Expense | 30,000 |
Net Income Before Taxes | 100,000 |
Taxes | 20,000 |
Net Income | 80,000 |
Requirements:
- Calculate the Current Ratio and Quick Ratio.
- Compute the Debt to Asset Ratio.
- Determine the Gross Profit Margin and Net Profit Margin.
- Calculate the Return on Investment (ROI) and Return on Equity (ROE).
- Discuss the significance of ROI in capital budgeting decisions.
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