Liquidity ratios and leverage ratios


Question 1: Liquidity ratios: Flying Penguins Corp. has total current assets of $11,845,175, current liabilities of $5,311,020, and a quick ratio of 0.89. What is its level of inventory?

Question 2: Leverage ratios: Breckenridge Ski Company has total assets of $422,235,811 and a debt ratio of 29.5 percent. Calculate the company's debt-to-equity ratio and the equity multiplier.

Question 3: DuPont equation: The Rangoon Timber Company has the following relationships:

Sales/Total assets = 2.23; ROA = 9.69%; ROE = 16.4%

What are Rangoon's profit margin and debt ratio?

Question 4: Profitability ratios: Cisco Systems has total assets of $35.594 billion, total debt of $9.678 billion, and net sales of $22.045 billion. Their net profit margin for the year was 20 percent, while the operating profit margin was 30 percent. What are Cisco's net income, EBIT ROA, ROA, and ROE?

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Accounting Basics: Liquidity ratios and leverage ratios
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