13. Problem 4.15 (Return on Equity and Quick Ratio) eBook Problem Walk Through Lloyd Inc. has sales of $700,000, a net income of $35,000, and the following balance sheet: Cash $ 178,640 Accounts payable $ 172.430 Receivables 251,020 Notes payable to bank 34,700 Inventories 924,000 Total current liabilities $ 257,180 Total current assets $1,353,660 Long-term debt 280,280 Net fixed assets 186,340 Common equity 1.002.540 Total assets $1,540,000 Total liabilities and equity $1,540,000 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, 2.25x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25x), 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 ratlo? Do not round Intermediate calculations. Round your answer to two decimal places. Grade it Now Save & Continue Continue without saving