Question

10. RedCap Manufacturing Ine is planning to borrow money by taking out a short term loan the increase notes payable) and depositing this money directly into the firm's checking account (ie increase cash RedCap believes that this event will have no affect on either sales or costs, and therefore no affect on net income. All else constant this new policy should cause the firm's quick ratie (assuming an initial quick ratio of 15) a Decrease b. Increase c. No Change d. Not enough information is provided to answer this question 11. BlueHat Inc. is planning to use excess cash that the company has in its checking account i.e., reduce cash) to pay off a long term loan balance. (i.e., decrease long-term debt). BlueHat believes that this event will have no affect on either sales or costs, and therefore no affect on net income All else constant, this new policy should cause the firm's debt ratio (assuming an initial debt ratio of 45%) to: a. Decrease b. Increase c. No Change d. Not enough information is provided to answer this question 12. GreenChapeau, Inc. is planning to increase its short-term loans (i.e., increase notes payable) to pay for an increase in the firm's basic inventory level (ie, increase inventory). GreenChapeau believes that this event will have no affect on either sales or costs, and therefore no affect on net income. All else constant, this new policy should cause the firm's current ratio (assuming a current ratio of 1.5) to a. Decrease b. Increase c. No Change d. Not enough information is provided to answer this question NOTE: All of the following questions are open-ended problems. You must compute an answer for every problem Make sure to not include symbols (i.e., S or %) or commas () when entering your answers on College Unless otherwise instructed in the specific question, for percentage answers, calculate your answer as a percent rounded to 2 decimal places. For example, you would record ROA.1263974 as 12.64% (note that on iCollege NOM will enter 12.64 without the percent sign). For dollar answers, round to the nearest dollar fie, sero decimal places). For example, you would record S/2.345.839-3 as $12,346 remember, on OR iCollege you will enter 12346 without a comma and without the dollar sign). 13. In 2019, Felton Farm Supplies, Inc. had ROA (return on assets) of 15 percent, total assets of $12,000,000 and a net profit margin of 4.75 percent. Based on the information, what was Felton Farm Supplies total asset turnover ratio in 2019? ((Enter your answer as a ratio rounded to 2 decimal places that is, do not convert to a percent; for example, enter 80/35 = 2.2857 as 2.29). 14. Krisle and Kringle's debt-to-total assets ratio is 0.835 (i.e., debt ratio = 83.5%). What is the company's det to-equity ratio? (Enter your answer as a ratio rounded to 2 decimal places that is, do not convert to a perce for example, enter 80/35 = 2.2857 as 2.29). 15. Philips, Inc has a debt ratio of 27.5% and ROE - 13.3%. What is Phillips' ROA? (Enter answer as a peror

Answer 1

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Answer 10
As both cash and current liabilities are increasing so Quick ratio will also increase.
Answer 11
Debt ratio means Total liabilities divided by total assets.
In the present case debt will decrease and cash balance will decrease which means total assets will decrease. SO debt ratio will also decrease.
Answer 12
As both current assets and current liabilities are increasing so Current ratio will also increase.
Answer 13
Felton Farm Supplies	Amount $	Note
Total assets	12,000,000.00	A
Return on total assets	15.00%	B
Net Profit	1,800,000.00	C=A*B
Net Profit margin	4.75%	D
Sales	37,894,736.84	E=C/D
Total asset turnover ratio	3.16	F=E/A
Answer 14
Krisel and Cringle
Debt to total assets ratio is 0.835
It means if Total assets is 1 then total liabilities is 0.835
Equity= Total assets - Total liabilities
Equity= 1 - 0.835
Equity= 0.165
Debt to Equity ratio is 0.835/.165
Debt to Equity ratio= 5.06
Answer 15
Philips
Debt ratio is 27.5%
It means if Total assets is 100 then total liabilities is 27.50
Equity= Total assets - Total liabilities
Equity= 100 -27.5
Equity= 72.5
Return on is Equity is 13.3%
Return on is Equity 13.3% of 72.50
Net profit is 9.64.
Return of assets (ROA)= Net profit/ Total Assets
Return of assets (ROA)= 9.64/ 100
Return of assets (ROA)= 9.64%