Question
Company: XYZ Corporation Financial Data for 2023 (in $000): Item Amount Cash 15,000 Accounts Receivable 25,000 Inventory 50,000 Prepaid Expenses 10,000 Total Current Assets 100,000
Company: XYZ Corporation
Financial Data for 2023 (in $000):
Item | Amount |
Cash | 15,000 |
Accounts Receivable | 25,000 |
Inventory | 50,000 |
Prepaid Expenses | 10,000 |
Total Current Assets | 100,000 |
Property, Plant & Equipment | 200,000 |
Total Assets | 300,000 |
Accounts Payable | 20,000 |
Short-term Debt | 25,000 |
Other Current Liabilities | 15,000 |
Total Current Liabilities | 60,000 |
Long-term Debt | 100,000 |
Equity | 140,000 |
Total Liabilities and Equity | 300,000 |
Income Statement for 2023 (in $000):
Item | Amount |
Sales | 500,000 |
Cost of Goods Sold | 300,000 |
Gross Profit | 200,000 |
Operating Expenses | 100,000 |
Interest Expense | 20,000 |
Net Income Before Taxes | 80,000 |
Taxes | 16,000 |
Net Income | 64,000 |
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 Assets (ROA) and Return on Equity (ROE).
- Discuss how the profitability ratios can influence investor decisions.
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