1.) Winston Washers\'s stock price is $85 per share. Winston has $10 billion in
ID: 2742363 • Letter: 1
Question
1.) Winston Washers's stock price is $85 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 450 million shares of common stock outstanding. What is Winston's market/book ratio? Round your answer to two decimal places. Do not round intermediate calculations.
2.) Ace Industries has current assets equal to $10 million. The company's current ratio is 2.5, and its quick ratio is 2.0.
What is the firm's level of current liabilities? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000
$
What is the firm's level of inventories? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000
$
3.) Comprehensive Ratio Calculations
The Kretovich Company had a quick ratio of 1.5, a current ratio of 3.5, a days sales outstanding of 27.0 days (based on a 365-day year), total current assets of $550,000, and cash and marketable securities of $120,000. What were Kretovich's annual sales? Round your answer to the nearest cent. Do not round intermediate calculations.
4.) The Morris Corporation has $900,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are $4.5 million, its average tax rate is 35%, and its net profit margin on sales is 6%. If the company does not maintain a TIE ratio of at least 4 to 1, then its bank will refuse to renew the loan and bankruptcy will result. What is Morris's TIE ratio? Round intermediate calculations to two decimal places. Round your answer to two decimal places.
Explanation / Answer
1. Book value per share=6,000,000,000/450,000,000=13.33333
Market to book ratio= market price per share/Book value per share
=85/13.33333
=6.375 times
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