11 May Question41. Tapley Dental Supply Company has the follow
Question
Net income: $240 Sales: $10,000 Total assets: $6,000
Debt ratio: 75% TIE ratio: 2.0 Current ratio: 1.2
BEP ratio: 13.33%
If Tapley could streamline operations, cut operating costs, and raise
net income to $300, without affecting sales or the balance sheet (the
additional profits will be paid out as dividends), by how much would
its ROE increase?
a. 3.00%
b. 3.50%
c. 4.00%
d. 4.25%
e. 5.50%
42. Your company had the following balance sheet and income statement
information for 2003:
Balance sheet:
Cash $ 20
A/R 1,000
Inventories 5,000
Total C.A. $ 6,020 Debt $ 4,000
Net F.A. 2,980 Equity 5,000
Total Assets $ 9,000 Total claims $ 9,000
Income statement:
Sales $10,000
Cost of goods sold 9,200
EBIT $ 800
Interest (10%) 400
EBT $ 400
Taxes (40%) 160
Net Income $ 240
The industry average inventory turnover is 5. You think you can change
your inventory control syste
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