Examine the financial statements below. Use this information to answer questions 1-7. Note: All figures are in millions of dollars.

The XXX Corporation: Balance Sheet, 2018

Cash & marketable securities $200 Accounts payable 100

Accounts receivable 150 Notes payable 100

Inventories 250 Total current liabilities $200

Total current assets $600 Long-term debt 400

Total liabilities $600

Fixed assets 900

Common stock 50

Retained earnings 850

Total equity $900

Total assets $1,500 Total liabilities and equity $1,500

The XXX Corporation: Income Statement, 2018

Sales revenue $1,200

Cost of goods sold 700

Selling expenses 200

Depreciation 150

Earnings before interest and taxes $150

Interest paid 50

Taxable income $100

Taxes (40%) 40

Net income $60

1. The quick ratio is:

0.57 B. 1.75 C. 3.0 D. 1.25 E. 0.80

2. The equity multiplier is:

1.67 B. 0.60 C. 0.40 D. 1.50 E. 0.67

3. The net profit margin is:

A. 0.05 B. 0.15 C. 0.60 D. 0.50 E. 0.12

4. The operating cash flow for 2018 was ____ million.

A. +$60 B. -$60 C. +$260 D. +$160 E. +$100

5. The current market price of XXX is $30 per share. The price earnings ratio is 25. The number of shares outstanding is _______ million.

1. 10 B. 20 C. 30 D. 40 E. 50

6. The total asset turnover ratio is:

1. 0.8 B. 1.25 C. 2.0 D. 4.0 E. 6.0

7. If XXX were to acquire $50 million in inventory with a $50 million increase in accounts payable (other things equal), the current ratio would _____, and the quick ratio would _____.

A. increase, increase

B. not change, decrease

C. not change, not change

D. decrease, increase

E. decrease, decrease