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Lloyd Inc. has sales of $150,000, a net income of $16,500, and the following balance sheet: ROE wil ✔ -Select- Y increase decrease What w Cash Receivables Inventories X Total current assets Net fixed assets Total assets The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. $19,125 Accounts payable 70,500 Notes payable to bank 180,000 Total current liabilities $269,625 Long-term debt 105,375 Common equity $375,000 Total liabilities and equity $ 31,500 18,750 $ 50,250 73,875 250,875 $375,000 percentage points. s new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.

Lloyd Inc. has sales of $150,000, a net income of $16,500, and the following balance sheet: ROE wil ✔ -Select- Y increase decrease What w Cash Receivables Inventories X Total current assets Net fixed assets Total assets The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. $19,125 Accounts payable 70,500 Notes payable to bank 180,000 Total current liabilities $269,625 Long-term debt 105,375 Common equity $375,000 Total liabilities and equity $ 31,500 18,750 $ 50,250 73,875 250,875 $375,000 percentage points. s new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Lloyd Inc. has sales of $150,000, a net income of $16,500, and the following balance sheet: Cash Receivables Inventories Total current assets Net fixed assets Total assets The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. percentage points. s new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. ROE wil ✔ -Select- y increase decrease What w $ 19,125 Accounts payable 70,500 Notes payable to bank 180,000 Total current liabilities $269,625 Long-term debt 105,375 Common equity $375,000 Total liabilities and equity $ 31,500 18,750 $ 50,250 73,875 250,875 $375,000
Transcribed Image Text:Lloyd Inc. has sales of $150,000, a net income of $16,500, and the following balance sheet: Cash Receivables Inventories Total current assets Net fixed assets Total assets The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x), if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. percentage points. s new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. ROE wil ✔ -Select- y increase decrease What w $ 19,125 Accounts payable 70,500 Notes payable to bank 180,000 Total current liabilities $269,625 Long-term debt 105,375 Common equity $375,000 Total liabilities and equity $ 31,500 18,750 $ 50,250 73,875 250,875 $375,000
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