Business, 05.03.2021 22:40, danidavis2002

Lloyd Inc. has sales of $450,000, a net income of $36,000, and the following balance sheet:Cash$148,770 Accounts payable$117,450Receivables244,035 Notes payable to bank71,775Inventories613,350 Total current liabilities$189,225Total current assets$1,006,155 Long-term debt207,495Net fixed assets298,845 Common equity908,280Total assets$1,305,000 Total liabilities and equity$1,305,000The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.

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Lloyd Inc. has sales of $450,000, a net income of $36,000, and the following balance sheet:Cash$148,...