1. The 2017 balance sheet of Dream, Inc., showed current assets of $4,545 and cu

Question

1. The 2017 balance sheet of Dream, Inc., showed current assets of $4,545 and current liabilities of $2,825. The 2018 balance sheet showed current assets of $3,280 and current liabilities of $1,690.

What was the company's 2018 change in net working capital, or NWC? (do not round intermediate calculations. A negative answer should be indicated by a minus sign.)

2. DTO, Inc., has sales of $12 million, total assets of $9.9 million, and total debt of $7.9 million. Assue the profit margin is 6 percent.

-a. What is the company's net income? (do not round intermediate calculations. enter your answer in dollars not in millions, e.g., 1,234,567.)

-b. What is the company's ROA and what is the company's ROE? (do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places)

3. Queen, Inc., has a total debt ratio of .32.

-a. What is its debt-equity ratio?

-b. What is its equity multiplier?

(do not round intermediate calculations. Round your answer to 2 decimal places)

Explanation / Answer

Answer to Question 1:

Net Working Capital, 2017 = Current Assets, 2017 - Current Liabilities, 2017
Net Working Capital, 2017 = $4,545 - $2,825
Net Working Capital, 2017 = $1,720

Net Working Capital, 2018 = Current Assets, 2018 - Current Liabilities, 2018
Net Working Capital, 2018 = $3,280 - $1,690
Net Working Capital, 2018 = $1,590

Change in Net Working Capital = Net Working Capital, 2018 - Net Working Capital, 2017
Change in Net Working Capital = $1,590 - $1,720
Change in Net Working Capital = -$130

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