Question

EXHIBIT 1 The balance sheet and income statement shown below are for Muller Industries. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets Cash and Securities Accounts Receivable Inventories Total Current Assets Net Plant and Equipment Total Assets 2018 $2,290 10,890 12,760 $25,940 $20,060 $46,000 $7,170 8,020 Liabilities and Equity Accounts Payable Notes Payable Accruals Total Current Liabilities Long-Term Bonds Total Debt Common Stock Retained Earnings Total Common Equity Total Liabilities and Equity 3,730 $18,920 $11,815 $30,735 $6,805 8,460 $15,265 $46,000 2018 $61,600 58,246 Income Statement (Millions of $) Net Sales Operating costs (except Depreciation) Depreciation Earnings Before Interest and Taxes (EBIT) Less Interest Earnings Before Taxes (EBT) Taxes Net Income 903 $2,451 927 $1,524 533 $990 Other Data: Shares Outstanding (Millions) Common Dividends (Millions of $) Interest Rate on Notes Payable & L-T Bonds Federal Plus State Income Tax Rate Year-End Stock Price 600.00 $346.67 6.25% 35% $23.77

Answer 1

Total Asset Turnover Ratio = Net Sales / Total Assets	61600/46000	1.34
Days sales outstanding = AR * 365 / Sales	10890*365/61600	64.53
Current Ratio = Current Assets / Current Liabilities	25940/18920	1.37
TIE ratio = EBIT / interest expenses	2451/927	2.64
Quick Ratio = (Current Assets - Inventory) / Current Liabilities	(25940-12760)/18920	0.70