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Long-term debt ratio 0.3  

Times interest earned 10.0 

Current ratio 1.2  

Quick ratio

1.0 

Cash ratio 0.4  Inventory turnover 3.0  

Average collection period 73 days 

 

Use the above information from the tables to work out the following missing entries, and then calculate the company's return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.)

 

INCOME STATEMENT (Figures in $ millions)

Net sales:

Cost of goods sold:

Selling, general, and administrative expenses 20.00

Depreciation 30.00

Earnings before interest and taxes (EBIT):

Interest expense:

Income before tax:

Tax (35% of income before tax):

Net income:



BALANCE SHEET(Figures in $ millions) This Year Last Year

Assets

Cash and marketable securities $30

Accounts receivable $44

Inventories $36

Total current assets $110

Net property, plant, and equipment $35

Total assets $145


Liabilities and shareholders' equity

Accounts payable $35.00 $30

Notes payable $ 40.00 45

Total current liabilities $75

Long-term debt 26

Shareholders' equity 44

Total liabilities and shareholders' equity $195.00 $145

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