The following table gives abbreviated balance sheets and income statements for Estée Lauder Companies. Assume a corporate tax rate of 34.39%.
($ in millions)
End of Year Start of Year
Balance Sheet
Assets
Current assets:
Cash and marketable securities $1,403 $1,136
Accounts receivable 896 761
Inventories 1,011 842
Other current assets 507 443
Total current assets 3,817 3,182
Fixed assets:
Tangible fixed assets
Property, plant, and equipment 2,877 2,540
Less accumulated depreciation 1,717 1,498
Net fixed assets 1,160 1,042
Other long-term assets 1,459 1,206
Total assets $6,436 $5,430
Liabilities and Shareholders' Equity
Current liabilities:
Debt due for repayment $ 153 $ 38
Accounts payable 1,820 1,564
Total current liabilities 1,973 1,602
Long-term debt 1,095 1,220
Other long-term liabilities 636 625
Total liabilities 3,704 3,447
Total shareholders' equity 2,732 1,983
Total liabilities and shareholders' equity $6,436 $5,430
Income Statement
Net sales $8,825
Cost of goods sold 1,952
Selling, general, and administrative expenses 5,501
Depreciation 313
Earnings before interest and taxes (EBIT) 1,059
Interest expense 79
Taxable income 980
Tax 337
Net income $ 643
Dividends 163
Addition to retained earnings 480
Where appropriate use assets at start of year rather than average assets.
a. Calculate the return on assets. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Return on assets %
b. Calculate the operating profit margin. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Operating profit margin %
c. Calculate the sales-to-assets ratio. (Round your answer to 2 decimal places.)
Sales-to-assets ratio
d. Calculate the inventory turnover. (Round your answer to 2 decimal places.)
Inventory turnover
e. Calculate the debt-equity ratio. (Round your answer to 2 decimal places.)
Debt-equity ratio
f. Calculate the current ratio. (Round your answer to 3 decimal places.)
Current ratio
g. Calculate the quick ratio. (Round your answer to 4 decimal places.)
Quick ratio