Question

The balance sheet and income statement shown below are for Big D Café:

Balance Sheet (millions of $)

Assets

Cash and securities                                                          2,500

Accounts receivable                                                        11,500

Inventories                                                                        16,000

Total current assets                                                        30,000

Net plant and equipment                                             20,000

Total assets 50,000

Liabilities and Equity

Accounts payable                                                             9,500

Notes payable                                                                   7,000

Accruals                                                                               5,500

Total current liabilities                                                    22,000

Long-term debt                                                                15,000

Total liabilities                                                                   37,000

Common stock                                                                  2,000

Retained earnings                                                            11,000

Total common equity                                                     13,000

Total liabilities and equity                                            50,000

Income Statement (millions of $)

Sales                                                                                      87,500

Operating costs except depreciation 81,813

Depreciation   1,531

EBIT                                                                                       4,156

Interest expense   1,375

EBT                                                                                         2,781

Taxes 973

Net income   1,808

Other data

Shares outstanding (million)                                        500

Common dividends $632.73

Interest rate on notes payable and L-T debt 6.25%

Tax rate 35%

Year-end stock price $43.39

Please answer the following questions:

1. What is the firm’s quick ratio?
2. What is the Inventory turnover ratio?
3. What is the firm’s days sales outstanding? Assume a 365-day year
4. What is the firm’s ROA?
5. What is the firm’s total debt to total capital ratio?
6. What is the firm’s profit margin?
7. What is the firm’s ROE using the DuPont equation?

with steps, please

Answer 1