Given the following financial data, compute: a. Return on equity. b. Quick ratio. c. Long-term debt to

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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Related Book For  book-img-for-question

Fundamentals of Investment Management

ISBN: 978-0078034626

10th edition

Authors: Geoffrey Hirt, Stanley Block

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