The following data apply to Jacobus and Associates (millions of dollars): Cash and marketable securities $ 100,00 Fixed assets $ 283,50 Sales $1.000,00 Net Income $ 50,00 Quick ratio 2,0 Current ratio 3,0 DSO 40,55 days ROE 12% Jacobus has no preferred stock – only common equity, current liabilities and long term debt. a. Find Jacobus’s (1) Account receivable, (2) current liabilities, (3) current assets, (4) Total assets, (5) ROA, (6) common equity, and (7) long term debt
The following data apply to Jacobus and Associates (millions of dollars):
Cash and marketable securities $ 100,00
Fixed assets $ 283,50
Sales $1.000,00
Net Income $ 50,00
Quick ratio 2,0
Current ratio 3,0
DSO 40,55 days
ROE 12%
Jacobus has no
debt.
a. Find Jacobus’s (1) Account receivable, (2) current liabilities, (3) current assets, (4)
Total assets, (5) ROA, (6) common equity, and (7) long term debt
b. in part a, you should have found Jacobus’s accounts receivable = $111,1 million. If
Jacobus could reduce its DSO fro, 40,55 days to 30,4 days while holding other things
constant, how much cash would generate? If this cash were used to buy back
common stock (at book value), this reducing the amount of common equity, how
would this affect (1) the ROE, (2) the ROA, (3) the ratio of total debt to total assets?
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