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Financial Statement Analysis - Nickel & Dime Company

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?

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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 ...

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.

$2.19