Questions : 1 Liquidity Ratios Use this information to calculate the ratios below. Cash Accounts receivable Inventory Accounts payable Average daily operating costs Total assets $ 900 1,200 2,100 1,600 70 8,600 Current ratio, Cash ratio, Quick ratio, Interval measure, and Net working capital to total assets N Questions : 2 Long-Term Solvency Ratios A firm has total assets of $146,000 and a total debt ratio of 40% What is the firm's debt-equity ratio? 3 Questions : 3 Long-Term Solvency Ratios A firm has a long-term debt of $63,000. The long-term debt ratio is 0.40 and the equity multiplier is 1.8. What is the amount of total assets? Hint: By using the equity multiplier, we can determine the amount of total assets. But, we will need to know the amount of total equity. Total equity can be found by using the long-term debt ratio. Questions : 4 Long-Term Solvency Ratios Firm A has earnings before interest and taxes of $27,931. The times interest earned ratio is 5.3 and the cash coverage ratio is 8.6. What is the amount of the interest-paid expense? What is the amount of the depreciation expense? LO 56% 7:15 Umniah lun. CH 3.1 Homework(2) , 17 is 7 Questions : 5 Asset Utilization Ratios Sales and accounts receivables are valued at the retail selling price. Cost of goods sold, inventory, and accounts payable are valued at the wholesale purchase price When computing turnover rates, we match retail prices with retail prices and wholesale prices with wholesale prices Questions : 5 Asset Utilization Ratios Retail prices: Sales Receivables turnover Accounts receivable Wholesale prices: Inventory turnover Cost of goods sold Inventory Accounts payable turnover Cost of goods sold Accounts payable 7 Questions : 5 Asset Utilization Ratios Firm Z has sales of $927,450, accounts receivable of $34,350, inventory of $48,600, and costs of goods sold of $648,810. Round the answers to two decimal places. What is the inventory turnover rate? How many days does it take sell inventory? What is the accounts receivable turnover rate? How many days does it take to collect a payment from a customer? 57% @ 7:15 Umniah lun. CH 3.1 Homework(2) , Questions : 6 Asset Utilization Ratios A firm has current liabilities of $21,800 total assets of $82,900, and sales of $149,200. The net working capital is $4,600. What is the net working capital turnover rate? What is the total asset turnover rate (up to two decimal places)? Questions : 6 Asset Utilization Ratios Smitz Inc. has current liabilities of $21,800, total assets of $82,900, and sales of $149,200. The net working capital is $4,600. What is the fixed asset turnover rate (up to two decimal places)? 10 Autiana Questions : 7 Profitability Ratios A firm has net income of $123,000 on sales of $2.4 million. Total assets are $2.46 million and total equity is $1.5 million. What is the profit margin? What is the return on equity? What is the return on assets? 11 Questions : 8 Profitability Ratios What is the DuPont formula? What is each part of the DuPont formula called? Why use the DuPont formula? ROE = Profit marginx Total asset turnoverxEquity multiplier PM x TT XEM Net income Sales Sales Total assets Total assets Total equity 12 Questions : 8 Profitability Ratios Firm P has sales of $324,000 and total assets of $216,000. The debt-equity ratio is 0.5 and the profit margin is 5.4%. What are the values of the three parts of the DuPont formula? What is the ROE? Hint: Step 1: Solve for total equity using the debt-equity ratio and the formula: TA = TD + TE 13 Questions : 9 Profitability Ratios A firm has net income of $368,400, total assets of $23.946 million, and an equity multiplier of 1.6. What is the return on equity? 14 Questions : 10 Profitability Ratios A firm has sales of $12,600, total assets of $8,100, and a debt-equity ratio of 0.80. The return on equity is 14%. What is the net income? Here are some formula hints. ROEN Net income Total equity TD=TA TE - TA-TE Debt-equity ratio = TE 15 Questions : 11 Market Value Ratios A firm has sales of $1.8 million, net income of $150,000, and total equity of $631,000. The earnings growth rate is 3.4%. There are 75,000 shares of common stock outstanding. Each share is currently selling for $54.20. What is the price-earnings ratio? What is the PEG ratio? What is the price-sales ratio? What is the market-to-book ratio? 16 Questions : 12 Market Value Ratios Bedford Supply has assets with a book value of $347,000 and a market value of $421,000. The firm estimates that it could replace all of its assets at a cost of $459,000. What is Tobin's Q ratio