Problem 2: The following data apply to ABC Corporation (millions of dollars)

Cash and marketable securities 100

Fixed assets 283.50

Sales 1000

Net income 50

Quick ratio 2

Current ratio 3

DSO 40.55 days

ROE 12%

ABC Corporation has no preferred stock----only common equity, current liabilities and long-term debt.

Compute the following for ABC Corporation:

1. Accounts Receivable

2. Current Liabilities

3. Current Assets

4. Total Assets

5. ROA

6. Common equity

7. Long-term Debt

QUESTION 3 Over the past year, ABC Corporation has realized an increase in its current ratio and a drop in its total assets turnover ratio. However, the company's sales, quick ratio and fixed asset turnover ratio have remained constant. What explains these changes?