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# Financial Statement Analysis - Nickel & Dime Company

See the attached file.
The following information should be used and PLEASE PROVIDE formulas used:

Nickel & Dime Company
2006 Income Statement
(\$ in thousands)

Net sales \$5,680
Less: Cost of goods sold 4,060
Less: Depreciation 420
Earnings before interest and taxes 1,200
Less: Interest paid 30
Taxable Income \$1,170
Less: Taxes 410
Net income \$ 760

Nickel & Dime Company
2005 and 2006 Balance Sheets
(\$ in thousands)

2005 2006 2005 2006
Cash \$ 70 \$ 180 Accounts payable \$1,350 \$1,170
Accounts rec. 980 840 Long-term debt 720 500
Inventory 1,560 1,990 Common stock 3,200 3,500
Total \$2,610 \$3,010 Retained earnings 940 1,200
Net fixed assets 3,600 3,360
Total assets \$6,210 \$6,370 Total liabilities & equity \$6,210 \$6,370

1. In 2006, how many days on average did it take Nickel & Dime Company to sell its inventory?
2. What is the debt-equity ratio for 2006?
3. What is the times-interest-earned ratio for 2006?
4. What is the equity multiplier for 2006?
5. What is the return on equity for 2006?

#### Solution Preview

See attached file.

The following information should be used and PLEASE PROVIDE formulas used:

Nickel & Dime Company
2006 Income Statement
(\$ in thousands)

Net sales \$5,680
Less: Cost of goods sold 4,060
Less: Depreciation 420
Earnings before interest and taxes 1,200
Less: Interest paid 30
Taxable Income \$1,170
Less: Taxes 410
Net income \$ 760

Nickel & Dime Company
2005 and ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer how many days on average did it take Nickel & Dime Company to sell its inventory, what is the debt-equity ratio for 2006, what is the times-interest-earned ratio for 2006, what is the equity multiplier for 2006, and what is the return on equity for 2006.

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