Problem 4.15 (Return on Equity and Quick Ratio) Question 7 of 9 Check My Work (2 remaining) ET eBook Problem Walk-Through Lloyd Inc. has sales of $750,000, a net income of $45,000, and the following balance sheet: Cash $87,975 Accounts payable $126,225 Receivables 170,850 Notes payable to bank 72,675 Inventories 714,000 Total current liabilities $198,900 Total current assets $972,825 Long-term debt 216,750 Net fixed assets 302,175 Common equity 859,350 Total assets $1,275,000 $1,275,000 Total liabilities and equity 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, 1.75x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 1.75x); 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. 25.72 % What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. 1.30