Following data apply to Hi-Tech Company (Rs in Thousand) Cash and marketable securities Rs. 100 Sales Rs. 1,000 Fixed assets Rs. 283.5 Net income Rs.…
BBS Fundamentals of Financial Management · 2077 · Solved Question with Answer
Following data apply to Hi-Tech Company (Rs in Thousand)
| Cash and marketable securities | Rs. 100 |
| Sales | Rs. 1,000 |
| Fixed assets | Rs. 283.5 |
| Net income | Rs. 50 |
| Quick ratio | 2.0 x |
| Current ratio | 3.0 x |
| Days sales outstanding (DSO) | 40 days |
| Return on equity | 12% |
Calculation is based on a 360 days.
Hi-Tech has not issued any preferred stocks.
Find Hi-Tech's (1) Account receivable, (2) Current liabilities, (3) Current assets, (4) Total assets and (5) Return on assets. (5)
b. Kathmandu Gift Center produces and sells dolls. Each unit is solid for Rs. 80. The fixed costs are Rs. 3,00,000. Variable costs are Rs. 50 per unit.
i. How many units must be sold to achieve the break-even point?
ii. What is the degree of operating leverage at sales of 15,000 units?