Chapter 3 Practice problem 2 Question 1 Nimble Ltd. has: - Current Assets = $600,000(including Inventory = $150,000)- Current Liabilities = $400,000 Calculate the Quick Ratio and interpret its meaning. Question 2 Starbright Inc. reports: - Net Income = $75,000- Total Assets = $950,000 Calculate the Return on Assets (ROA). Question 3 Maxwell Corp. has: - Total Assets = $2,500,000- Total Equity = $1,000,000- Net Income = $120,000 a) Calculate the Equity Multiplier (EM). b) Calculate the Return on Equity (ROE). Question 4 A firm has: - Current Assets = $850,000- Current Liabilities = $425,000 Calculate the Current Ratio and interpret it. Question 5 A company has: - Total Debt = $1,800,000- Total Equity = $1,200,000 Calculate the Debt-to-Equity Ratio and interpret its meaning. Question 6 A firm reports: - EBIT = $250,000- Interest Expense = $50,000 Calculate the Times Interest Earned Ratio. Question 7 A firm has: - Net Income = $90,000- Sales = $600,000 Calculate the Profit Margin. Question 8 A company's stock trades at: - Price per Share = $45- Earnings per Share (EPS)= $3 Calculate the Price-Earnings (P/E) Ratio and interpret its meaning. Question 9 Fast Move Ltd. has the following data: Net Income = $120,000 Sales = $2,000,000 Total Assets = $1,000,000 Total Equity = $500,000 Using the Du Pont Identity, calculate the Return on Equity (ROE) for FastMove Ltd. Question 10 Aqua Pure Inc. currently has: Profit Margin =5% Total Asset Turnover =1.5 Equity Multiplier =1.8 a) Calculate the current ROE. b) If Aqua Pure increases its Profit Margin to 7%, what will the new ROE be (assuming other factors remain unchanged)?