Question 1 (Total 15 marks) Financial statement for White Eagle Limited at 2017

Question

Question 1 (Total 15 marks) Financial statement for White Eagle Limited at 2017 fiscal year end as following: White Eagle Limited Balance Sheet as of December 31, 2017 (US dollar in millions) Cash Receivables 1,682 Inventories $ 1,902 298 $ 1,407 Accounts payable Other current liabilities t Nu 1,673 ese N Total CA4,762 Net fixed assets 27,595 Total assets 32,357 Total CL Long-term debt Common equity Total liabilities and equity 2,200 12,715 17,442 32 lish urse/ ,357 ubjec White Eagle Limited Income Statement for Year Ended December 31, 2016 (US dollar in millions) Sales Cost of goods sold Gross profit Other operation expenses ction $ 9,300 (6.904) $ 2,396 (671) $ 1725 (354) $1371 (587) $784 EBIT Interest expense EBT Tax expense Net Income a. Calculate the current ratio, quick ratio and inventory turnover for the company. If a

Explanation / Answer

Current Assets = 4,762…………….Given

Current Liabilities = 2,200………..Given

Thus, Current Ratio = 4,762/2200 = 2.16

Cash + Marketable Securities + Accounts Receivable = 1,407 +0 +1,682 = 3,089

Current Liabilities = 2,200

Thus, Quick Ratio = 3,089/2200 = 1.40

Sales = 9,300………Given

Inventory = 1,673……..Given

Thus, Inventory Turnover ratio = 9,300/1,673 = 5.55

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