You have correctly calculated the following ratios for Blue Royals Ltd. (BLUR): Quick ratio: 1.5 to...

 

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You have correctly calculated the following ratios for Blue Royals Ltd. ("BLUR"): Quick ratio: 1.5 to 1 6 times Inventory turnover: Debt to equity: Profit margin: 2 to 1 (debt total liabilities) 30% Required: Use the table below to indicate the impact of each of the following independent transactions on each of BLUR's ratios. Follow these instructions: 1) Copy and paste the below table in your response file 2) Replace each "?" in the table with one of: UP - to indicate the ratio will increase DOWN - to indicate the ratio will decrease NONE - to indicate the ratio will stay the same NO TABLE=NO MARKS. Transaction BLUR buys inventory for $200 from its supplier on credit and immediately sells it to a customer for $300 in cash. BLUR declares a cash dividend of $10,000 to its shareholders, to be paid in the next fiscal year. Due to a fire, BLUR's entire stock of inventory is completely burned. Quick Ratio 1.5 to 1 ? ? ? Inventory Turnover 6 times ? ? ? Debt to Equity 2 to 1 ? ? ? Profit Margin 30% ? ? 7 You have correctly calculated the following ratios for Blue Royals Ltd. ("BLUR"): Quick ratio: 1.5 to 1 6 times Inventory turnover: Debt to equity: Profit margin: 2 to 1 (debt total liabilities) 30% Required: Use the table below to indicate the impact of each of the following independent transactions on each of BLUR's ratios. Follow these instructions: 1) Copy and paste the below table in your response file 2) Replace each "?" in the table with one of: UP - to indicate the ratio will increase DOWN - to indicate the ratio will decrease NONE - to indicate the ratio will stay the same NO TABLE=NO MARKS. Transaction BLUR buys inventory for $200 from its supplier on credit and immediately sells it to a customer for $300 in cash. BLUR declares a cash dividend of $10,000 to its shareholders, to be paid in the next fiscal year. Due to a fire, BLUR's entire stock of inventory is completely burned. Quick Ratio 1.5 to 1 ? ? ? Inventory Turnover 6 times ? ? ? Debt to Equity 2 to 1 ? ? ? Profit Margin 30% ? ? 7

Answer rating: 100% (QA)

Transaction Quick Ratio 15 to 1 Inventory Turnover 6 times UP Debt to Equity ... View the full answer