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