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DEF Inc. provides the following financial details: Income Statement for Year Ended December 31, 2023 Total Sales: $1,500,000 Cost of Sales: $900,000 Gross Profit: $600,000

DEF Inc. provides the following financial details:

Income Statement for Year Ended December 31, 2023

  • Total Sales: $1,500,000
  • Cost of Sales: $900,000
  • Gross Profit: $600,000
  • Administrative Expenses: $250,000
  • Selling Expenses: $100,000
  • EBIT: $250,000
  • Interest Expense: $30,000
  • Tax Expense: $60,000
  • Net Profit: $160,000

Balance Sheet as of December 31, 2023

  • Assets:
    • Cash and Equivalents: $80,000
    • Accounts Receivable: $150,000
    • Inventory: $120,000
    • Property, Plant, and Equipment (Net): $450,000
    • Total Assets: $800,000
  • Liabilities and Equity:
    • Current Liabilities: $130,000
    • Long-term Debt: $270,000
    • Common Stock: $250,000
    • Retained Earnings: $150,000
    • Total Liabilities and Equity: $800,000

Required:

  1. Compute the ROI for DEF Inc.
  2. Determine the quick ratio.
  3. Calculate the net profit margin.
  4. Find the equity multiplier.
  5. Assess the interest coverage ratio.

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