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Consider the following financial data for Nguyen Corp.: Balance Sheet as of December 31, 2012 Cash & equivalents $ 128,000 Accounts payable $ 73,000 Accts.

Consider the following financial data for Nguyen Corp.:

Balance Sheet as of December 31, 2012

Cash & equivalents

$

128,000

Accounts payable $

73,000

Accts. receivable

206,500

Notes payable

160,500

Inventories

138,500

Accrued wages & taxes

51,500

Total current assets

$

473,000

Total current liabilities $

285,000

Long-term debt

359,500

Net plant & equip.

889,500

Common equity

718,000

Total assets

$

1,362,500

Total liab. & equity $

1,362,500

Profit & Loss Statement for 2012

Industry Average Ratios

Sales revenue

$

1,744,000

Current ratio

1.9

Cost of goods sold

1,360,500

Quick ratio

1.3

Gross profit

$

383,500

Days sales outstanding

33 days

Operating expenses

260,500

Inventory turnover

10.5

EBIT

$

123,000

Total asset turnover

1.6

Interest expense

37,500

Net profit margin

1.7%

Pre-tax income

$

85,500

Return on assets

2.8%

Income taxes (30%)

25,650

Return on equity

6.6%

Net profit

$

59,850

Debt ratio

58%

Compared to its competitors, Nguyen...

a.

converts its receivables to cash more quickly.

b.

generates more profit per dollar of total assets.

c.

finances a greater percentage of its assets with debt.

d.

has higher current and quick ratios.

e.

is using its total assets to generate sales more efficiently.

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