RETURN ON EQUITY AND QUICK RATIO
Lloyd Inc. has sales of $300,000, a net income of $24,000, and
the following balance sheet: Cash $78,000 Accounts payable $71,760
Receivables 101,400 Notes payable to bank 46,800 Inventories
374,400 Total current liabilities $118,560 Total current assets
$553,800 Long-term debt 113,100 Net fixed assets 226,200 Common
equity 548,340 Total assets $780,000 Total liabilities and equity
$780,000 The new owner thinks that inventories are excessive and
can be lowered to the point where the current...