liabilities-to-total-assets ratio of 45% The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $195,000. Sales, costs, and net income would not be affected, and the firm would maintain the 45% debt ratio. By how much would the reduction in assets improve the ROE shift 8. Use the following financial statements to determine the amount of each of the following uses of free cash flow in 2016: After-tax interest on debt, pay back principal on debt, pay dividends, buy back stock; buy non-operating assets (e.g,, short-term investments, investments in other companies, etc.) fn GREAT CORPORATION BALANCE SHEET (in millions of dollars) 2016 2015 2016 2015 Liobilities and equity Cash and cash Short term Accounts Receivable S30 $15 $60 $55 $40 $35 $50 $40 Accounts payable investn so $20 Accruals 580 $140 Notes payable $130 $105 $270 $200 Total current liabilities $400 $400 Total current assets Long-term debt $200 $255 Property, plant, and equipment Accumulated depreciation Total fixed assets S460 $380 $80 $30 Common stock $380 $350 Retained Earnings $165 $130 $285 $260 $450 $390 Total equity Total assets $780 $750 Total liabilities and equity $780 $750 GREAT CORPORATION INCOME STATEMENT (in millions of dollars) 2016 $1,200 $1,056 $144 S50 $94 $36 S58 $23 $35 Sales Expenses EBITDA Depreciation EBIT Interest Expense EBT Taxes Net Income