Please help and show all work! 1) If the quick ratio for a firm is .91, the tota
ID: 2638977 • Letter: P
Question
Please help and show all work!
1) If the quick ratio for a firm is .91, the total current assets is $781,800, and total current liabilities is $532,100. what is the level of Inventory for the firm? 2) If the days sales outstanding for a tints is 39 days and accounts receivable is $1,631,400, what is the level of sales for the firm? 3) If days purchases in inventory for a firm is 153 days, sales is $5,481,400, and the gross profit margin is 37%,what is the level of inventory? 4) If days payables outstanding for a firm is 52 days, sales is $5,875.800, and the gross profit margin is 31%, what is the level of accounts payable? 5) If the debt to asset ratio for a finis is .37 and the level of total assets is $8,743,900, what is the debt to equity ratio? 6) If the debt to equity ratio for a firm is 1.26, and the level of equity is $6,947,200, what is the level of total assets? 7) If total asset turnover for a firm is 2.18 and net profit margin is .0425, what is the return on assets? 8) If the firm in (7) has a debt to asset Ratio of .61, what is their return on equity? 9) If sales for a firm are $8,419,700 and the net profit margin is .0575, what is the earning after tax? 10)If the firm in (9) has total assets of $9,838,500, what is the return on assets?Explanation / Answer
Answer (1) Quick ratio= Current Assets - Inventory / Current liability
.91 = 781800-Inventory / 532100
Inventory = $ 297589
(2) Debtor turnvover ratio = Net credit sales / Average debtor
9.35 (365/39) = Net credit sales/1631400
Net credit sales = $15268230.76
(3) Net credit purchase = $5481400 * 63% (1-37%)
= $3453282
Creditor turnover ratio = Net credit purchase/ Average account payable
2.385 ( 365/153) = $3453282/ Average account payable
Average account payable = $1447917
(4) Net credit purchase = $5875800 * 69% (1-31%)
= $4054302
Creditor turnover ratio = Net credit purchase/ Average account payable
7.02 (365/52) = $ 4054302/ Average account payable
Average account payable = $ 577535.89
(5) Debt to total assets = Debt / Total assets
.37 = Debt / $8743900
Debt = $3235243
Equity = Total Assets - Debt
= $8743900- $3235243
= $5508657
Debt - Equity ratio = Debt / Equity
= 3235243/5508657
= 0.587
(6) Debt - Equity ratio = Debt / Equity
1.26 = Debt/ 6947200
Debt = $8753472
Total Assets = Debt + Equity
= 8753472 + 6947200
=$ 15700672
(7) Total Assets turnover ratio = Net sales/ Total Assets
2.18 = sale / total assets
Total assets = sales / 2.18
profit margin = net profit / total sale
0.425 = net profit / total sale
net profit = 0.425 * total sale
Return on assets = profit / total assets
= 0.425 * sale / (sales / 2.18)
= 0.9265
8) Debt / Total Assets = 0.61
Total Assetss - equity / Total Assets = 0.61
.39 Total assets = Equity
(9) Earning after Tax = Sales * Net profit margin
=$8419700 * .575
= $ 4841327.5
(10) Total Assets = $ 9838500
Return on Total Assets = Earning after Tax/ Total assets
= $4841327.5 / $9838500
= 49.21%