2-1Hindelang Corporation has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds through additional notes payable and use them to increase inventory. How much can Hindelang's short-term debt (notes payable) increase without pushing its current ratio below 2.0? What will be the firm's quick ratio after Hindelang has raised the maximum amount of short-term funds?
W. F. Bailey Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 5×, total current assets of $810,000, and cash and equivalents of $120,000 in 2012. If the cost of goods sold equaled 86 percent of sales, what were ...view middle of the document...
Last year Z&B Paints reported its net income as $650,000. A review of its income statement shows that Z&B's operating expenses (fixed and variable), excluding depreciation and amortization, were $1,500,000, its depreciation and amortization expense was $300,000, and its company's tax rate was 35 percent. Z&B has no debt—that is, the firm is financed with stock only.
a. What were Z&B's sales revenues last year?
b. What was Z&B's net cash flow last year?
Assume that you are given the following relationships for Zumwalt Corporation:
Calculate Zumwalt's net profit margin and debt ratio.
At the end of its fiscal year, Credit Card of America (CCA) had a current ratio of 3.5× and a quick ratio of 3.0×. If its total current assets equaled $73,500 at the end of the year, what was CCA's (a) current liabilities and (b) inventory?
At the end of the year, CWP's balance sheet showed that total assets were $500,000. At the same time, its return on assets (ROA) was 6 percent and its return on equity (ROE) was 8 percent. Compute CWP's (a) net income for the year and (b) amount of common equity on the balance sheet. CWP has no preferred stock.