For Question 8, use the information provided below.

Balance sheet:

	FYE 2050	FYE 2051
Current assets:
Cash	14,588	17,631
Accounts receivable	35,258	41,019
Inventory	65,567	71,505
Net plant and equipment	477,413	$498,421
Total assets	$592,826	$628,576
Current liabilities:
Accounts payable	$55,653	$63,073
Notes payable	21,895	25,324
Long-term debt	$58,000	$62,000
Common stock and paid-in surplus	$60,000	$60,000
Accumulated retained earnings	397,278	418,179
Total liabilities and owners' equity	$592,826	$628,576

Incomes statement:

	FY 2051
Sales revenues Cost of goods sold SG&A EBIT Interest expenses Net income	730,200 495,000 85,000 150,200 42,000 86,560

Share information at the end of fiscal year 2051:

The number of shares outstanding: 200,000 shares

Price per share: $10

Question 8

A) Determine the following financial ratios for 2050 and 2051: (i) NWC ratio, (ii) total debt to assets ratio, (iii) debt-to-equity ratio, rounded to four decimal places (e.g., 0.78715= 0.7872).

Answer (show the steps/calculation toward your answer):

B) Determine (i) inventory turnover ratio and (ii) interest coverage ratio (based on EBIT) for FY 2051. Additionally, (iii) decompose the firms ROE by conducting the DuPont analysis. Provide all numbers in four decimal places (e.g., 0.78715= 0.7872).

Answer (show the steps/calculation toward your answer):

C) Which of the following is correct? Choose only one.

1. The firms price to earnings (P/E) is 0.432810=0.04328 .
2. The DuPont analysis suggests that the firms ROE is lowered by its financial leverage.
3. Compared to market to book ratio, Tobins Q is more difficult to construct because it requires the estimate of the historical cost of the firms assets.
4. ALL of the above
5. NONE of the above

Answer: