FI 311 Connect homework #3

FI 311 Connect homework #3 - CONNECT 3 1 Jessica's Boutique...

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CONNECT 3 1) Jessica's Boutique has cash of \$41, accounts receivable of \$58, accounts payable of \$210, and inventory of \$170. What is the value of the quick ratio? .47 1.28 1.75 .28 .81 Quick ratio = (\$41 + \$58)/\$210 = \$0.47 2) A firm has a debt-equity ratio of .38. What is the total debt ratio? .61 1.38 .39 1.63 .28 The debt-equity ratio is 0.38. If total debt is \$38 and total equity is \$100, then total assets are \$138. Total debt ratio = \$38/\$138 = 0.28. 3) Al's Sport Store has sales of \$3,130, costs of goods sold of \$2,090, inventory of \$543, and accounts receivable of \$418. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? ( FORMAT TO 4 DECIMALS ) 94.8 days 63.3 days 93.5 days 111.9 days 110.8 days Inventory turnover = \$2,090/\$543 = 3.849 Days in inventory = 365/3.849 = 94.8 days 4) Galaxy United, Inc. 2009 Income Statement (\$ in thousands) Net sales \$5,690 Less: Cost of goods sold 4,060 Less: Depreciation 420 Earnings before interest and taxes 1,210

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Less: Interest paid 29 Taxable Income 1,181 Less: Taxes 413 Net income \$ 768 Galaxy United, Inc. 2008 and 2009 Balance Sheets (\$ in thousands) 2008 2009 2008 2009 Cash \$ 70 \$ 170 Accounts payable \$1,340 \$1,170 Accounts rec. 990 850 Long-term debt 710 530 Inventory 1,540 1,980 Common stock \$3,220 \$3,452 Total \$2,600 \$3,000 Retained earnings 910 1,178 Net fixed assets 3,580 3,330 Total assets \$6,180 \$6,180 \$6,330 What is the debt-equity ratio for 2009? .37
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FI 311 Connect homework #3 - CONNECT 3 1 Jessica's Boutique...

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