The following data apply to K-Mart (millions of dollars):
Cash and Marketable Securities $100
Fixed Assets $283.50
Sales $1,000
Net Income $50.00
Quick Ratio 2.0X
Current Ratio 3.0X
Days Sales Outstanding 40 days
Return On Equity 12%
Find K-Mart’s (1) accounts receivable (2) current liabilities (3) current assets, (4) total assets, (5) Return On Assets, (6) common equity, and (7) long-term debt
Hint: For Q (1) begin with the equation for Days Sales Outstanding= (Acc. Receivable over Sales/360), then solve for A/R
b) Suppose you were a potential investor, explain why would you be interested in free cash flow more than net income?