If Baldwin Corporation has $2 million in inventory, $5 million in total current assets, and $1.5 million in current liabilities, what will be the Current Ratio and Quick Ratio, assuming the industry average is 4.3? Kairos Industries achieved $17 million in sales and $3 million in net income. The value of assets totaled $6 million, as did the equal sum of liabilities plus equity. The company also paid taxes at 32% and interest at 6%. Determine the Net Profit Margin, Assets Turnover Ratio, ROA, ROE and Return on Invested Capital (ROIC). Liberty Solutions Inc. has annual sales of $125 million, inventory valued at $35 million, and $18 million in accounts receivable. Determine the Inventory Turnover Ratio (ITR) and Days Sales Outstanding (DSO), assuming an industry average of 90 days. Renew Company has an earnings per share (EPS) of $3.50, a value per share of $35, and a market value of $36. Calculate the price/earnings (P/E) ratio.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 13P
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  1. If Baldwin Corporation has $2 million in inventory, $5 million in total current assets, and $1.5 million in current liabilities, what will be the Current Ratio and Quick Ratio, assuming the industry average is 4.3?
  2. Kairos Industries achieved $17 million in sales and $3 million in net income. The value of assets totaled $6 million, as did the equal sum of liabilities plus equity. The company also paid taxes at 32% and interest at 6%. Determine the Net Profit Margin, Assets Turnover Ratio, ROA, ROE and Return on Invested Capital (ROIC).
  3. Liberty Solutions Inc. has annual sales of $125 million, inventory valued at $35 million, and $18 million in accounts receivable. Determine the Inventory Turnover Ratio (ITR) and Days Sales Outstanding (DSO), assuming an industry average of 90 days.
  4. Renew Company has an earnings per share (EPS) of $3.50, a value per share of $35, and a market value of $36. Calculate the price/earnings (P/E) ratio.
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