Chapter 3 part 2

Zoes Dog Toys Inc reported a debt to equity ratio of .5 times at the end of 2011. If the firms total assets at year end are $50 million, how much of their assets is financial with equity?

$33.33m

A firm reported year end sales of $20 million, it listed $7 million of Inventory on its balance sheet. Using a 365 day year how many days did the firms inventory stay on the premises?

127.75 days

The top part of Mars Inc 2013 balance sheet is listed as follows Current Assets: Cash and securities 10 AR 40 Inventory 160 Total 210 Current liabilities: Accured Wages and taxes 20 AP 30 Notes payable 40 Total 90 What are Mars Inc current ratio, quick ratio, and cash ratio for 2013?

2.3333, .5556, .1111

A Firm ended the year with an average collection period of 50 days. The firms credit sales were $11 million. What is the firms year end balance in accounts receivable?

$1.51 million

You are considering a stock investment in one of two firms both of which operate in the same industry. A finances its $20 million in asses with $18 million in debt and $2 million in equity. B finances its $20 million in assets with $2 million debt and $18 million in equity. Calculate the equity multiplier for the two firms

Firm A: 10 times Firm B : 1.11 times

You are considering a stock investment in one of two firms both of which operate in the same industry. A finances its $20 million in asses with $18 million in debt and $2 million in equity. B finances its $20 million in assets with $2 million debt and $18 million in equity. Calculate the debt to equity ratio of the two firms

Firm A: 9 times Firm B: 11 times

You are considering a stock investment in one of two firms. Both of which operate in the same industry. Lotsofdebt inc finances its $100 million in assets with $90 million in debt and $10 million in equity. Lotsofequity inc finances its $100 million in assets with $10 million in debt and $90 million in equity. What are the debt ratio, equity multiplier, and debt to equity for the two firms?

Lotsofdebt: 90 percent, 10 times, respectively; and lotsofequity: 10 percent, 1.11 times, respectively