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Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50 times Total asset tu
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Answer #1

Current Ratio = Current Assets / Current Liabilities
2.60 = Current Assets / $670
Current Assets = $1,742

Average Collection Period = 365 * Accounts Receivable / Credit Sales
50 = 365 * Accounts Receivable / $1,314
Accounts Receivable = $180

Inventory Turnover = Credit Sales / Inventory
1.50 = $1,314 / Inventory
Inventory = $876

Current Assets = Cash + Accounts Receivable + Inventory
$1,742 = Cash + $180 + $876
Cash = $686

Total Assets Turnover = Credit Sales / Total Assets
0.50 = $1,314 / Total Assets
Total Assets = $2,628

Total Assets = Current Assets + Fixed Assets
$2,628 = $1,742 + Fixed Assets
Fixed Assets = $886

Debt Ratio = Total Debt / Total Assets
0.75 = Total Debt / $2,628
Total Debt = $1,971

Total Debt = Current Liabilities + Long-term Debt
$1,971 = $670 + Long-term Debt
Long-term Debt = $1,301

Total Liabilities and Equity = Total Assets
Total Liabilities and Equity = $2,628

Total Liabilities and Equity = Total Debt + Stockholders’ Equity
$2,628 = $1,971 + Stockholders’ Equity
Stockholders’ Equity = $657

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