1) Computation of Cost of goods sold for Lambda Corporation:

Current Ratio = Current Assets/Current Liabilities

3.5 = Current Assets/$450,000

Current Assets = $450,000*3.5 = $1,575,000

 

Quick Ratio = (Current Assets - Inventory)/Current Liabilties

1.8 = ($1,57500 - Inventory)/$450,000

Inventory = $1,575,000 - 1.8*$450,000 = $765,000

 

Inventory Turnover Ratio = Cost of Goods Sold/Inventory

5.0 = Cost of Goods Sold/$765,000

Cost of Goods Sold = $765,000*5.0 = $3,825,000

 

 

2) Computation of Cisco's Net Income, EBIT, ROA and ROE:

Net Profit Margin = Net Income / Sales

20% = Net Income / $22.045 billion

Net Income = $22.045 billion * 20% = $4.409 billion

 

Operating Profit Margin = EBIT / Sales

30% = EBIT / $22.045 billions

EBIT = $22.045 billions * 30% = $6.614 billion

 

ROA = Net Income / Total Assets

= $4.409 billions/$35.594 billions

ROA = 12.39%

 

ROE = ROA*Equity Multiplier

Equity Multiplier = Total Assets / Total Equity

= $35.594 billions / ($35.594 billions-$9.678 billions)

= $35.594 billions/$25.916 billions

Equity Multiplier = 1.37

 

ROE = 12.39% * 1.37 = 17.01%