Use the following information to answer this question Windswept, Inc. 2010 Incom

Question

Use the following information to answer this question Windswept, Inc. 2010 Income Statement ($ in millions) Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes ess: Interest paid 10,650 7,900 $2,335 98 $2,237 783 $ 1,454 axable Income ess: Taxes Net income Windswept, Inc. 2009 and 2010 Balance Sheets ($ in millions) 2009 2009 2010 2010 $270$300 Accounts payable 1,090 1,970 1750$1,797 1,343 $3,340 $3,020 890 as 990 Long-term debt 1,730 Common stock ccounts rec. 1,060 Inventory $3,330 $3,020 Retained earnings 640 otal Net fixed assets 3,460 4,030 otal assets $6,790 $7,050 Total liab. & equity $6,7907,050 What is the equity multiplier for 2010? 1.80 3.53 1.33 2.72 2.33

Explanation / Answer

Answer:1.80

Equity Multiplier = Total Assets / Stockholders Equity

Equity Multiplier 2010 = 7050 / ( 3020 + 890 ) = 1.80

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