Refer to the Following Selected Financial Information from Gomez Electronics

question 218

Multiple Choice

Refer to the following selected financial information from Gomez Electronics. Compute the company's debt-to-equity ratio for Year 2. $\begin{array}{lrr}& \text { Year 2 } & \text { Year 1 } \\\text { Net sales } & \$ 478,500 & \$ 426,250 \\\text { Cost of goods sold } & 276,300 & 250,120 \\\text { Interest expense } & 9,700 & 10,700 \\\text { Net income before tax } & 67,250 & 52,680 \\\text { Net income after tax } & 46,050 & 39,900 \\\text { Total assets } & 317,100 & 288,000 \\\text { Total liabilities } & 181,400 & 167,300 \\\text { Total equity } & 135,700 & 120,700\end{array}$

• A) 1.75.
• B) 2.34.
• C) 0.75.
• D) 1.34.
• E) 2.63.

Analyze the cost-benefit of implementing lockbox systems to reduce collection time.

Calculate the present and net present value of the float under different conditions.

Distinguish between different types of floats and their effect on the firm's cash flow.

Evaluate the feasibility of various cash management tools including lockbox systems and their financial implications.

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Definitions:

ESATA

eSATA, short for External Serial Advanced Technology Attachment, is an extension of the SATA interface for external connectivity, providing faster data transfer rates for external storage devices.

External Hard Drive

A portable storage device that can be attached to a computer through a USB or other interface for the purpose of storing and backing up data.

Drive Bays

Drive Bays are compartments within a computer case designed to hold disk drives or other hardware components.

Tethering

The practice of connecting one device to another (e.g., a smartphone to a laptop) in order to share the first device’s internet connection with the second device.