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Company: STU Automotive Financial Data for 2023 (in $000): Item Amount Cash 30,000 Accounts Receivable 50,000 Inventory 20,000 Prepaid Expenses 5,000 Total Current Assets 105,000

Company: STU Automotive

Financial Data for 2023 (in $000):

Item

Amount

Cash

30,000

Accounts Receivable

50,000

Inventory

20,000

Prepaid Expenses

5,000

Total Current Assets

105,000

Property, Plant & Equipment

195,000

Total Assets

300,000

Accounts Payable

40,000

Short-term Debt

20,000

Other Current Liabilities

10,000

Total Current Liabilities

70,000

Long-term Debt

100,000

Equity

130,000

Total Liabilities and Equity

300,000

Income Statement for 2023 (in $000):

Item

Amount

Sales

550,000

Cost of Goods Sold

350,000

Gross Profit

200,000

Operating Expenses

90,000

Interest Expense

20,000

Net Income Before Taxes

90,000

Taxes

18,000

Net Income

72,000

Requirements:

  1. Calculate the Current Ratio and Quick Ratio.
  2. Compute the Debt to Asset Ratio.
  3. Determine the Gross Profit Margin and Net Profit Margin.
  4. Calculate the Return on Investment (ROI) and Return on Equity (ROE).
  5. Discuss how debt management impacts financial performance.

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