Lloyd Inc. has sales of $350,000, a net income of $35,000, and the following balance sheet:

Cash	$	89,180		Accounts payable	$	117,600
Receivables		147,000		Notes payable to bank		63,700
Inventories		519,400		Total current liabilities	$	181,300
Total current assets	$	755,580		Long-term debt		180,320
Net fixed assets		224,420		Common equity		618,380
Total assets	$	980,000		Total liabilities and equity	$	980,000

The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places.

ROE will (increase/decrease) by ___ percentage points.

What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.

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