Problem
Consider the following financial information:
a) Total Equity = $500,000
b) Total Liabilities = $300,000
c) Average Inventory = $150,000
d) Cost of Goods Sold = $4,000,000
e) Current Liabilities = $200,000
f) Current Assets = $600,000
g) Net Income = $100,000
h) Net Sales = $1,000,000
i) Average Accounts Recievable = $125,000
j) Average Number of Shares = $55,000
Given this financial information, answer the following questions:
A. Compute the Debt to Total Assets ratio, and provide a paragraph outlining what this means to a given business (why it is important).
B. Compute the Accounts Receivable Turnover ratio, and provide a paragraph outlining what this means to a given business (why it is important).
C. Compute the Quick Ratio, and provide a paragraph outlining what this means to a given business (why it is important).
D. Compute the Earnings Per Share ratio, and provide a paragraph outlining what this means to a given business (why it is important).