The following financial data are to be used for questions 1-5:
2000 2001
Cash & equivalents $25 $75
Accounts receivable $450 $700
Inventory $400 $500
Gross Fixed assets $1,000 $1,000
(Accumulated Depr.) ($200) ($250)
Total Assets $1,675 $2,025
Accounts payable $100 $200
Notes payable $50 $275
Operating accruals $60 $55
Current maturities $50 $50
Long-term debt $400 $382
Shareholders’ equity $1,015 $1,063
Total Liabilities & Equity $1,675 $2,025
2000 2001
Revenues$1,500$2,250
COGS$750$1,125
Operating expenses$700$750
Depreciation$100$50
Interest$40$45
Taxes$(36)$112
Net Income$(54)$168
Dividends$45$120
1) What is the 2000 quick ratio?
2) What is the 2000 working capital requirement to sales ratio?
3) What is the 2001 cash conversion efficiency?
4) How long is the 2000 cash conversion period?
5) What is the 2001 sustainable growth rate?
6) Torque Manufacturing forecasts that its production will require 500,000 tons of bauxite over its planning period. Demand for Torque's products is stable over time. Ordering costs amount to an average of $20.00 per order. Holding costs are estimated at $1.25per ton of bauxite. What is the EOQ for Torque?