Lloyd Inc. has sales of $700,000, a net income of $56,000, and the following balance sheet:

Cash$201,250Accounts payable$190,750Receivables299,250Notes payable to bank54,250Inventories945,000Total current liabilities$245,000Total current assets$1,445,500Long-term debt262,500Net fixed assets304,500Common equity1,242,500Total assets$1,750,000Total liabilities and equity$1,750,000

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, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); 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.

%

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

x