lloyd Inc. has sales of $450,000, a net income of $22, 500, and the following balance sheet: Cash $ 57,510 Accounts payable $ 78, 570 Receivables 128, 790 Notes payable to bank 28,350 Inventories 453,600 Total current liabilities $ 106,920 Total current assets $ 639,900 Long-term debt 134, 460 Net fixed assets 170, 100 Common equity 568,620 Total assets $ 810,000 Total liabilities and equity $ 810,000 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\times, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25\times), 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. ROE will -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. \times

lloyd Inc. has sales of $450,000, a net income of $22, 500, and the following balance sheet: Cash $ 57,510 Accounts payable $ 78, 570 Receivables 128, 790 Notes payable to bank 28,350 Inventories 453,600 Total current liabilities $ 106,920 Total current assets $ 639,900 Long-term debt 134, 460 Net fixed assets 170, 100 Common equity 568,620 Total assets $ 810,000 Total liabilities and equity $ 810,000 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\times, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25\times), 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. ROE will -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. \times

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Lloyd Inc. has sales of $500,000, a net income of $45,000, and the following balance sheet: Cash $133,200 Accounts payable $142,800 Receivables 180,000 Notes payable to bank 90,000 Inventories 612,000 Total current liabilities $232,800 Total current assets $925,200 Long-term debt 158,400 Net fixed assets 274,800 Common equity 808,800 Total assets $1,200,000 Total liabilities and equity $1,200,000 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, 2x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2x); 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. % What will be the firm's new quick ratio? Do not round intermediate calculations. Round…
Lloyd Inc. has sales of $200,000, a net income of$15,000, and the following balance sheet: Cash $ 10,000 Accounts payable $ 30,000Receivables 50,000 Notes payable to bank 20,000Inventories 150,000 Total current liabilities $ 50,000Total current assets $ 210,000 Long-term debt 50,000Net fixed assets 90,000 Common equity 200,000Total assets $ 300,000 Total liabilities and equity $300,000The new owner thinks that inventories are excessive and can be lowered to the pointwhere the current ratio is equal to the industry average, 2.53, without affecting sales or netincome. If inventories are sold and not replaced (thus reducing the current ratio to 2.53), ifthe funds generated are used to reduce common equity (stock can be repurchased at bookvalue), and if no other changes occur,…
We are given the following information for the Pettit Corporation. Sales (credit) Cash Inventory Current liabilities Asset turnover Current ratio Debt-to-assets ratio Receivables turnover $ 2,880,000 188,000 890,000 811,000 1.35 times 2.30 times a. Accounts receivable b. Marketable securities c. Fixed assets d. Long-term debt 40 % 5 times Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Lienser Fraktala TAMARA TANT RISHI TRITATE FAST JET PARETSTRANS I nemal osted or annemangen MANENBER HAGPAINT MANSION LARPURCO Calculate the following balance sheet items. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
The Griggs Corporation has credit sales of $908,950. 2.65 times 1.95% 10 times 14 times 1.78 times 40% Total assets turnover O Cash to total assets Accounts receivable turnover Inventory turnover Current ratio Debt to total assets Using the above ratios, complete the balance sheet. Note: Round your answers to the nearest whole dollar. Cash Accounts receivable Inventory Total current assets Fixed assets Total assets Assets GRIGGS CORPORATION Balance Sheet Liabilities and Stockholders' Equity Current debt Long-term debt Total debt Equity Total debt and stockholders' equity
Consider the following financial data for Nguyen Industries: Statement of Financial Position as of December 31, 2018 Cash $ 232,500 Accounts payable $ 86,500 Accts. receivable 357,500 Short-term bank note 254,000 Inventories 150,500 Accrued wages & taxes 80,000 Total current assets $ 740,500 Total current liabilities $ 420,500 Long-term debt 566,000 Net fixed assets 774,500 Common equity 528,500 Total assets $ 1,515,000 Total liab. & equity $ 1,515,000 Profit & Loss Statement for 2018 Industry Average Ratios Net sales $ 1,894,000 Current ratio 1.4× Cost of goods sold 1,382,500 Quick ratio 1.0× Gross profit $ 511,500 Days sales outstanding 63 days Operating expenses 373,000 Inventory turnover 9.5× EBIT $ 138,500 Total asset turnover 1.5× Interest expense 64,000 Net…
Consider the following financial data for Terry Enterprises: Balance Sheet as of December 31, 2018 Cash $ 86,000 Accounts payable $ 15,500 Accts. receivable 91,500 Notes payable 93,500 Inventories 65,500 Accruals 19,500 Total current assets $ 243,000 Total current liabilities $ 128,500 Long-term debt 162,500 Net plant & equip. 419,500 Common equity 371,500 Total assets $ 662,500 Total liab. & equity $ 662,500 Statement of Earnings for 2018 Industry Average Ratios Net sales $ 642,500 Current ratio 2.2× Cost of goods sold 482,000 Quick ratio 1.7× Gross profit $ 160,500 Days sales outstanding 44 days Operating expenses 119,500 Inventory turnover 6.7× EBIT $ 41,000 Total asset turnover 0.6× Interest expense 14,500 Net profit margin 7.2% Pre-tax earnings $ 26,500…
Baker Inc has the following balance sheet and income statement data: Cash $14,000 Accounts payable $42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 280,000 Total CL $70,000 Total CA $364,000 Long-term debt 140,000 Net fixed assets 126,000 Common equity 280,000 Total assets $490,000 Total liab. and equity $490,000 Sales $280,000 Net income 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.15, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change? Do not round your intermediate calculations.
Jordan Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 280,000 Total CL $ 70,000 Total CA $ 364,000 Long-term debt 140,000 Net fixed assets 126,000 Common equity 280,000 Total assets $ 490,000 Total liab. and equity $ 490,000 Sales $ 280,000 Net income $ 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.15, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change? Do not round your intermediate calculations. a. 9.84 p.p. b. 2.34 p.p. c. 13.95 p.p. d. 31.58…
HCB, Inc.'s financial partial statements are shown below. HCB Income Statement 2021 Sales 2,000.0 Assets 2021 Cash 86.0 Accounts receivable 360.0 Inventory 320.0 Short-term investments 223.0 Total current assets 989.0 Net fixed assets 1,940.0 Total assets 2,929.0 Liabilities and equity 2021 Accounts payable 200.0 Accruals 240.0 Short-term debt 292.9 Total current liabilities 732.9 Long-term debt 1,757.4 Total liabilities 2,490.3 Par + paid in capital less treasury 238.7 Retained earnings 200.0…
EMM, Inc. has the following balance sheet: EMM, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 1,200 Accounts payable $ 4,900 Accounts receivable 8,900 Bank note payable 7,700 Inventory 6,100 Long-term assets 4,400 Equity 8,000 $ 20,600 $ 20,600 It has estimated the following relationships between sales and the various assets and liabilities that vary with the level of sales: Accounts receivable = $3,560 + 0.35 Sales, Inventory = $2,356 + 0.28 Sales, Accounts payable = $1,449 + 0.20 Sales. If the firm expects sales of $27,000, what are the forecasted levels of the balance sheet items above? Round your answers to the nearest dollar. Accounts receivable: $ Inventory: $ Accounts payable: $ Will the expansion in accounts payable cover the expansion in inventory and accounts receivable? Round your answers to the nearest dollar. The expansion in accounts payable of $ the total…
A company has $1,364 in inventory, $4,809 in net fixed assets, $652 in accounts receivable, $290 in cash, $610 in accounts payable, and $5,404 in equity. What is the company's long-term debt? Multiple Choice O $1,711 $1,138 O$1,280 $1,669
The financial statements of Neale Corporation include the following information: Current Year Prior Year Balance sheet: Cash $ 24,000 $ 25,300 Short-term investments 36,000 29,600 Accounts receivable, net 76,200 83,250 Inventory 90,000 81,950 Prepaid expenses 19,800 9,900 Total current assets 246,000 230,000 Total current liabilities 140,000 115,560 Income statement: Net credit sales $ 645,000 Cost of goods sold 467,000…

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