Accounts receivable-current liabilities-current assets

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Reference no: EM131338733

a) The following data apply to K-Mart (millions of dollars):

Cash and Marketable Securities $100

Fixed Assets $283.50

Sales $1,000.0

Net Income $50.00

Quick Ratio 2.0X

Current Ratio 3.0X

Days Sales Outstanding 40 days

Return On Equity 12%

Find K-Mart’s (1) accounts receivable (2) current liabilities (3) current assets, (4) total assets, (5) Return On Assets, (6) common equity, and (7) long-term debt

Hint: For Q (1) begin with the equation for Days Sales Outstanding= (Acc. Receivable over Sales/360), then solve for A/R.

b) Suppose you were a potential investor, explain why would you be interested in free cash flow more than net income?

Reference no: EM131338733

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