The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.25, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places.

Question of 11 Check My Work (2 remaining) ebook Problem Walk-Through Lloyd Inc. has sales of $300,000, a net income of $21,000, and the following balance sheet: Cash $ 50,400 Accounts payable $ 92,400 Receivables 118,440 Notes payable to bank 38,640 Inventories 462,000 Total current liabilities $ 131,040 Total current assets $630,840 Long-term debt 101,640 Net Foxed assets 209,160 Common equity 607,320 Total assets $340,000 Total liabilities and equity $840,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.25, without affecting sales or met Income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25x), the funds generated are used to reduce common equity (stock can be purchased at book value), and if no other changes occur, by how much will the Rot change? Do not round intermediate calculations. Round your answer to two decimal laces. ROE Wi-Select- by percentage points What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places Check My Work (2 remaining) 0-leon Key