The following is the balance sheet and income statement for Metro Eagle Outfitters, in condensed form,...

4.3 Ratings (715 Votes)

Ans. 1	Inventory turnover = Cost of sales / Average Inventory
	2019	$2,087,480 / $352,983	5.91	times
	2018	$1,977,471 / $337,361	5.86	times

	*Average inventory = (Beginning inventory + Ending inventory) / 2
	2019	($371,514 + $334,452) / 2	$352,983
	2018	($303,208 + $371,514) / 2	$337,361

Ans. 2	Current ratio = Total current assets / Total current liabilities
	2019	$1,143,800 / $437,902	2.61 : 1
	2018	$1,291,488 / $411,401	3.14 : 1

Ans. 3	Quick ratio = (Total current assets - Inventory) / Total current liabilities
	2019	($1,143,800 - $334,452) / $437,902	1.85 : 1
	2018	($1,291,488 - $371,514) / $411,401	2.24 : 1

Ans. 4	Cash flow ratio = Cash flow from operations / Total current liabilities
	2019	$510,671 / $437,902	1.17
	2018	$411,317 / $411,401	1.00

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Balance Sheet	2019		2018		2017
Cash and short-term investments	$	632,992	$	747,044	$	736,693
Accounts receivable		46,521		40,510		37,121
Inventory		334,452		371,514		303,208
Other current assets		129,835		132,420		101,388
Total current assets		1,143,800		1,291,488		1,178,410
Long-lived assets		581,832		644,482		590,802
Total assets	$	1,725,632	$	1,935,970	$	1,769,212
Current liabilities	$	437,902	$	411,401	$	389,837
Total liabilities		504,245		518,386		417,741
Shareholders’ equity		1,221,387		1,417,584		1,351,471
Total debt and equity	$	1,725,632	$	1,935,970	$	1,769,212
Income Statement
Sales	$	3,476,202	$	3,120,265	$	2,945,694
Cost of sales		2,087,480		1,977,471		1,765,143
Gross margin	$	1,388,722	$	1,142,794	$	1,180,551
Operating expenses		986,484		867,385		862,976
Earnings before interest and taxes	$	402,238	$	275,409	$	317,575
Net income	$	234,108	$	151,905	$	140,847
Interest paid in cash		82		184		163
Taxes paid in cash		142,209		99,856		45,937
Cash Flows
Cash flow from operations	$	510,671	$	411,317	$	382,416
Capital expenditures		94,139		89,866		76,304
Dividends		85,792		85,792		83,366

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