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Fisher Apparel

1. The Fisher Apparel Company balance sheet for the year ended 2006 is as follows:

December 31, 2006
(In Thousands of Dollars)

Assets
Cash 3,810
Marketable Securities 2,700
Accounts Receivable 27,480
Inventories 41,295
Plant and Equipment 64,650
Less Accumulated depreciation 17,100
Net plant and equipment 47,550
Total Assets 122,835
Liabilities and stockholder's equity
Accounts payable 14,582
Current portion of long term debt 3,000
Accrued wages 1,200
Accrued taxes 3,600
Other current liabilities 2,200
Long term debt 33,000
Common stock ($10 par) 19,500
Capital contributed in excess of par 15,000
Retained earnings 30,753
Total liabilities and stockholder's equity 122,835

a. What is Fisher's investment in current assets?
b. Determine Fisher's working capital investment
c. Determine Fisher's current ratio.
d. Determine Fisher's return on stockholder's equity if its 2006 earnings after tax are $10,000(000).

Solution Preview

a. What is Fisher's investment in current assets?

Current asses are - Cash, Accounts Receivables, Marketable securities and inventory. The investment in current assets is Cash 3,810+Marketable securities 2,700+Accounts receivable 27,480 + Inventory 41,295 = $75,285,000

b. Determine Fisher's working capital ...

Solution Summary

The solution has the calculations for current ratio, working capital, current assets and return on equity for Fisher Apparels.

$2.19