(PLEASE SHOW ALL WORK AND FORMULAS) (PLEASE SHOW ALL WORK AND FORMULAS) 24) SDJ,
ID: 2813181 • Letter: #
Question
(PLEASE SHOW ALL WORK AND FORMULAS)
(PLEASE SHOW ALL WORK AND FORMULAS)
24) SDJ, Inc., has net working capital of $1,050, current liabilities of $4,300, and inventory of $1,300. What is the current ratio? What is the quick ratio? 25) Music Row, Inc. has sales of $32 million, total assets of $43 million, and total debt of $9 million. If the profit margin is 7%, what is net income? What is ROA? what is ROE? 26) Bethesda Co. had additions to retained earnings for the year just ended of $275,000. The firm paid out S150,000 in cash dividends, and it has ending total equity of S6 million. If Bethesda currently has 125,000 shares of common stock outstanding, what are earnings per share? Dividends per share? Book value per share? If the stock currently sells for S95 per share, what is the market to book ratio? The price earnings ratio?Explanation / Answer
Answer to Question 24:
Net Working Capital = Current Assets - Current Liabilities
$1,050 = Current Assets - $4,300
Current Assets = $5,350
Current Ratio = Current Assets / Current Liabilities
Current Ratio = $5,350 / $4,300
Current Ratio = 1.24
Quick Ratio = (Current Assets - Inventory) / Current Liabilities
Quick Ratio = ($5,350 - $1,300) / $4,300
Quick Ratio = 0.94
Answer to Question 25:
Assets Turnover = Sales / Total Assets
Assets Turnover = $32 million / $43 million
Assets Turnover = 0.74
Total Equity = Total Assets - Total Debt
Total Equity = $43 million - $9 million
Total Equity = $34 million
Equity Multiplier = Total Assets / Total Equity
Equity Multiplier = $43 million / $34 million
Equity Multiplier = 1.26
Net Income = Profit Margin * Sales
Net Income = 7% * $32 million
Net Income = $2.24 million
ROA = Profit Margin * Assets Turnover
ROA = 7% * 0.74
ROA = 5.18%
ROE = ROA * Equity Multiplier
ROE = 5.18% * 1.26
ROE = 6.53%
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