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3-1
Green Sisters has a DSO of 20 days. The company's average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year.

3-2
Vigo Vacations has an equity multiplier of 2.5. The company's assets are financed with some combination of long- term debt and common equity. What is the company's debt ratio?

3-3
Winston Washer's stock price is $75 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston's market/book ratio?

3-4
A company as an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio?

3-5
Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is it ROE?

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Solution Summary

The solution explains some questions relating to ratio calculations

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1. Level of accounts receivable = DSO X Per Day sales = 20 X 20,000 = $40,000

2. Debt Ratio = Total Debt/Total Assets
We are given equity multiplie = Total Assets/Total Equity = 2.5
Total Equity/Total Assets ...

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