Problem 4-22 Financial Ratios (LO3)

Long-term debt ratio	0.3
Times interest earned	10.0
Current ratio	1.6
Quick ratio	1.0
Cash ratio	0.3
Inventory 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 companys 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.)

Net sales 18.00 Cost of goods sold Selling, general, and administrative expenses Depreciation Earnings before interest and taxes (EBIT) 28.00 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 $ 28 Accounts receivable 42 Inventories 34 Total current assets $ 104 Net property, plant, and equipment 33 $ 137 Total assets Liabilities and shareholders' equity Accounts payable Notes payable Total current liabilities $ 25.00 $ 20 35.00 40 $ 60 28 Long-term debt Shareholders' equity 49