Question

Given the following financial data, compute:
a. Return on equity.
b. Quick ratio.
c. Long-term debt to equity.
d. Fixed-charge coverage.
Assets: 
Cash 
$ 2,500 
Accounts receivable 
3,000 
Inventory 
6,500 
Fixed assets 
8,000 
Total assets 
$20,000 
Liabilities and stockholders’ equity: 
Short-term debt 
$ 3,000 
Long-term debt 
2,000 
Stockholders’ equity 
15,000 
Total liabilities and stockholders’ equity 
$20,000 
Income before fixed charges and taxes 
$ 4,400 
Interest payments 
800 
Lease payment 
400 
Taxes (35 percent tax rate) 
1,120 
Net income (after-taxes) 
$ 2,080 


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  • CreatedSeptember 21, 2015
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