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eBook Problem Walk-Through Lloyd Inc. has sales of $350,000, a net income of $35,000, and the following balance sheet: Cash $

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Answer #1

a)

particulars Current Expected remarks
Net income 35000 35000 no change
common equity 686140 107590 =686140-578550=107590
ROE 5.10% 32.53% =net income/common equity
Change in ROE 5.38% =32.53-5.10/5.10

b)

Cash 50750
receivable 194880
Quick assets(Cash +receivable) 245630
Accounts payable 97440
Other current liabilities (notes payable) 78155
Current Liabilities (accounts payable +notes payable) 175595
Quick Ratio =Quick assets/current liability 1.3988
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