Tech Supplies Company, Incorporated, is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended February 1, 2020, are shown below. Tech Supplies Company, Incorporated Balance Sheet At February 1, 2020 ($ in millions) Assets Current assets: Cash and cash equivalents $ 2,126 Accounts receivable (net) 1,237 Inventory 5,066 Other current assets 422 Total current assets 8,851 Long-term assets 3,708 Total assets $ 12,559 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 5,200 Other current liabilities 3,975 Total current liabilities 9,175 Long-term liabilities 2,246 Shareholders’ equity 1,138 Total liabilities and shareholders’ equity $ 12,559 Tech Supplies Company, Incorporated Income Statement For the Year Ended February 1, 2020 ($ in millions) Revenues $ 39,603 Costs and expenses 38,168 Operating income 1,435 Other income (expense)* (80) Income before income taxes 1,355 Income tax expense 728 Net income $ 627 *Footnote asteriskIncludes $215 of interest expense. Required: 1-a. Calculate the current ratio for Tech Supplies for its fiscal year ended February 1, 2020. 1-b. Calculate the acid-test ratio for Tech Supplies for its fiscal year ended February 1, 2020. 1-c. Calculate the debt to equity ratio for Tech Supplies for its fiscal year ended February 1, 2020. 1-d. Calculate the times interest earned ratio for Tech Supplies for its fiscal year ended February 1, 2020.
Tech Supplies Company, Incorporated, is a leading retailer specializing in consumer electronics. A condensed income statement and
Tech Supplies Company, Incorporated
Balance Sheet
At February 1, 2020
($ in millions)
Assets
Current assets:
Cash and cash equivalents $ 2,126
Accounts receivable (net) 1,237
Inventory 5,066
Other current assets 422
Total current assets 8,851
Long-term assets 3,708
Total assets $ 12,559
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 5,200
Other current liabilities 3,975
Total current liabilities 9,175
Long-term liabilities 2,246
Shareholders’ equity 1,138
Total liabilities and shareholders’ equity $ 12,559
Tech Supplies Company, Incorporated
Income Statement
For the Year Ended February 1, 2020
($ in millions)
Revenues $ 39,603
Costs and expenses 38,168
Operating income 1,435
Other income (expense)* (80)
Income before income taxes 1,355
Income tax expense 728
Net income $ 627
*Footnote asteriskIncludes $215 of interest expense.
Required:
1-a. Calculate the current ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-b. Calculate the acid-test ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-c. Calculate the debt to equity ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-d. Calculate the times interest earned ratio for Tech Supplies for its fiscal year ended February 1, 2020.
Note: For all requirements, round your answers to 2 decimal places.
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