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Long-term debt ratio	0.3
Times interest earned	8.0
Current ratio	1.1
Quick ratio	1.0
Cash ratio	0.3
Inventory turnover	4.0
Average collection period	73	days

Use the above information from the tables to work out the following missing entries, and then calculate the companys return on equity. Note: Turnover and the average collection period are calculated using start-of-year, not average, values. (Enter your answers in millions. Round intermediate calculations and final answers to 2 decimal places.)

A.

	INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Selling, general, and administrative expenses 23.00 Depreciation 33.00 Earnings before interest and taxes (EBIT) Interest expense Income before tax Tax (35% of income before tax) Net income

B. Construct a Balance sheet and find the values for long term debt and shareholder's equity.

BALANCE SHEET (Figures in $ millions) This Year Last Year Assets Cash and marketable securities $27.00 $33 Accounts receivable 63.00 47 Inventories 9.00 39 Total current assets $99.00 $119 Net property, plant, and equipment 136.00 38 Total assets $235.00 $157 Liabilities and shareholders equity Accounts payable $40.00 $35 Notes payable 50.00 55 Total current liabilities $90.00 $90 Long-term debt 21 Shareholders equity 46 Total liabilities and shareholders equity $235.00 $157

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