FINANCE-SDJ, Inc., has net working capital of $1,490, current liabilities of $4,660

1. SDJ, Inc., has net working capital of $1,490, current
liabilities of $4,660, and inventory of $1,845.
(a) What is the current ratio?
(b) What is
the quick ratio?
2. Wakers, Inc., has sales of $32 million, total assets of
$24 million, and total debt of $9 million.
(a) If the profit margin is 8 percent, what
is the net income?
(b) What is the ROA?
(c) What is
the ROE?
3. Ortiz Lumber Yard has a current accounts receivable
balance of $317,615. Credit sales for the year just ended were $2,938,600.
(a) What is the receivables turnover?
(b) What is
the days’ sales in receivables?
4. Crystal Lake, Inc., has a total debt ratio of 0.31.
(a) What is its debt-equity ratio?
(b) What is its equity multiplier?

5. Use the following
information to answer this question.

Windswept, Inc. 2010 Income Statement ($ in millions)

Net sales

$ 9,600

Less: Cost of goods
sold

7,810

Less: Depreciation

470

Earnings before
interest and taxes

$ 1,320

Less: Interest paid

106

Taxable Income

$ 1,214

Less: Taxes

425

Net income

$ 789

Windswept, Inc. 2009 and 2010 Balance Sheets ($ in millions)

2009

2010

2009

2010

Cash

$ 240

$ 270

Accounts payable

$ 1,410

$ 1,410

Accounts rec.

1,020

920

Long-term debt

1,110

1,310

Inventory

1,840

1,710

Common stock

$ 3,360

$ 3,280

Total

$ 3,100

$ 2,900

Retained earnings

650

900

Net fixed assets

3,430

4,000

Total assets

$ 6,530

$ 6,900

Total liab. &
equity

$ 6,530

$ 6,900

What is the quick
ratio for 2010?

Use the following
information to answer this question.

Windswept, Inc. 2010 Income Statement ($ in millions)

Net sales

$ 11,550

Less: Cost of
goods sold

8,200

Less: Depreciation

445

Earnings before
interest and taxes

$ 2,905

Less: Interest
paid

110

Taxable Income

$ 2,795

Less: Taxes

978

Net income

$ 1,817

Windswept, Inc. 2009 and 2010 Balance Sheets ($ in millions)

2009

2010

2009

2010

Cash

$ 330

$ 360

Accounts payable

$ 1,990

$ 2,067

Accounts rec.

1,210

1,110

Long-term debt

1,120

1,403

Inventory

2,150

1,820

Common stock

$ 3,460

$ 3,080

Total

$ 3,690

$ 3,290

Retained earnings

700

950

Net fixed assets

3,580

4,210

Total assets

$ 7,270

$ 7,500

Total liab. &
equity

$ 7,270

$ 7,500

What is the equity
multiplier for 2010?

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