Question
Long-term debt ratio 0.3 Times interest earned 10.0 Current ratio 1.2 Quick ratio 1.0 Cash ratio 0.4Inventory turnover 3.0 Average collection period 73 days Use
Long-term debt ratio 0.3
Times interest earned 10.0
Current ratio 1.2
Quick ratio 1.0
Cash ratio 0.4Inventory turnover 3.0
Average collection period 73 days
Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values.(Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.)
INCOME STATEMENT (Figures in $ millions)
Net sales:
Cost of goods sold:
Selling, general, and administrative expenses 20.00
Depreciation 30.00
Earnings before interest and taxes (EBIT):
Interest expense:
Income before tax:
Tax (35% of income before tax):
Net income:
BALANCE SHEET(Figures in $ millions) This Year Last Year
Assets
Cash and marketable securities $30
Accounts receivable $44
Inventories $36
Total current assets $110
Net property, plant, and equipment $35
Total assets $145
Liabilities and shareholders' equity
Accounts payable $35.00 $30
Notes payable $ 40.00 45
Total current liabilities $75
Long-term debt 26
Shareholders' equity 44
Total liabilities and shareholders' equity $195.00 $145
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