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Ch3 HW

# Ch3 HW - Francis Roman FIN100.2 Chapter 3 Homework#1-8 1...

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Francis Roman FIN100.2 Chapter 3 Homework #1-8 1. Given NWC = 1570 Cur. Liabilities = 4380 Inventory = 1875 Equation NWC = Current Assets - Current Liabilities 1570 = (1875 + x) - 4380 x = 4075 Current Assets = 5950 Current Ratio = Current Assets/Current Liabilities Current Ratio = 5950/4380 Quick Ratio = (Current Assets - Inventory)/Current Liabilities Quick Ratio = (5950 - 1875)/4380 Solution Current Ratio = 1.36 Quick Ratio = .93 2. Given Sales = 24,000,000 Total Assets = 18,000,000 Total Debt = 7,000,000 Profit Margin = 8% Equation Profit Margin = Net Income/Sales 8% = NI/24,000,000 NI= 1,920,000 ROA = Net Income/Total Assets ROA = 1920000/18000000 ROA=.107 Total Equity = Total Assets - Total Debt Total Equity = 18000000 - 7000000 Total Equity = 11000000 ROE=Net Income/Total Equity ROE = 1920000/11000000 ROE = .1745 Solution NI = 1.92 Million ROE = 10.67% ROA = 17.45% 3. Given Current Accts Rec = 387615 Credit Sales = 2945600 Equation Receivables Turnover = Sales/Accts Recv Receivables Turnover = 2945600/387615 Receivables Turnover = 7.6 Days' Sales in Receivables = 365 days/Receivables Turnover Days' Sales in Receivables = 365 days/7.6 Days' Sales in Receivables = 48.03

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Solution Receivables Turnover = 7.6 Days' Sales in Receivables = 48.03 On average, it takes 48 days for credit customers to pay off their accounts.
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Ch3 HW - Francis Roman FIN100.2 Chapter 3 Homework#1-8 1...

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