Suppose that you are given the following data for Niles Company :

Note: The data and calculations are based on a 365day year.

Cash and equivalents	$225,000
Fixed assets	$650,000
Sales	$2,500,000
Net income	$112,500
Current liabilities	$240,000
Current ratio	2.5
DSO	18.25
ROE	12.00%

The current ratio is equal to ________. Plugging in the relevant values for the current ratio and current liabilities, and then solving yields a current assets value of ______. Adding fixed assets to current assets yields a value of total assets of _________.

The days sales outstanding (DSO) ratio is equal to ________. Plugging in the relevant values for the DSO ratio and sales, and then solving yields an accounts receivable balance of ________.

Return on equity (ROE) is to _____________. Plugging in the relevant values for ROE and net income yields a value of total common equity of approximately _______.

Recall that Total Assets=Total Liabilities and EquityTotal Assets=Total Liabilities and Equity.

Mathematically, total liabilities and equity is equal to __________. Plugging in the relevant values for total liabilities and equity, current liabilities, and equity (calculated using the previous identify) and then solving for long-term debt, yields a long-term debt of _______ .

Return on assets (ROA) is equal to the product of profit margin multiplied by total assets turnover, which is equivalent to ___________. Plugging in the relevant values for net income and total assets yields an ROA of approximately ____________.

Recall the following identity:

Current Assets=Cash and equivalents+Accounts Receivable+InventoriesCurrent Assets=Cash and equivalents+Accounts Receivable+Inventories

The quick ratio is equal to _____________. Plugging in the relevant values for current assets, current liabilities, and inventories (calculated using the previous identity) yields a quick ratio of approximately _________.

Suppose that Niles could reduce its DSO from 18.25 to 12.

Given the formula for DSO from the video, as well as the same annual sales of $2,500,000, the new value accounts receivable (associated with the new DSO) must be _________, all else equal.

The change (or the absolute value of the difference between the original and new values) in accounts receivable represents an amount of approximately _______ in cash generated.

As a result of the stock buy back, the ROA and ROE both _______.

Suppose Niles uses the cash generated by the lower DSO to buy back common stock at book value, thus reducing common equity.

As a result of this new, lower, DSO, total debt _______ and total capital _______ . This means that the total debt/total capital ratio must _______ .