Homework Answers
The answer is e.both a and c
Return on equity = Net income/Equity capital
Net profit margin = Net income/sales
Net income is derived after deducting interest expense
Hence, an increase in interest rate will lead a decrease in net income
Return on total assets = EBIT(1-TAX)/average total assets
Hence, this ratio is not affected by change in interest rate
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All other things being equal, an increase in the interest rate that the company must pay...
Profitability ratios reflect the net result of all the firm's erect. B policies and operating decisions....
Profitability ratios reflect the net result of all the firm's erect. B policies and operating decisions. The profitability ratios include the: (1) Operating profit margin, (2) Net profit margin, (3) Return on total assets (ROA), (4) Basic earning power (BEP) ratio, and (5) Return on common equity (ROE). The operating profit margin indicates what percentage of sales remain after et B are accounted for. It is a measure of the firm's operating effidency. Its equation is: B. It measures the...
Financial Ratio 2 - Interpretation Debt: Interest Coverage Ratio [ EBIT/int. exp] : - would it...
Financial Ratio 2 - Interpretation Debt: Interest Coverage Ratio [ EBIT/int. exp] : - would it make sense to use the cash version of EBIT? Return on Assets [operating return on assets = ROA = operating Profits / Total Assets] - Any linkage between ROA and Valuation equation [ V0 = CF/(1+r)^t ] ? Operating Profit Margin [OPM = EBIT/ SALES]: - what pictures of operating efficiency do ROA and OPM give to us? Asset Turnover [Sales/ Assets] This is...
5. Highly leveraged firms have higher ROE than lower leveraged firms. 6. All things equal, the...
5. Highly leveraged firms have higher ROE than lower leveraged firms. 6. All things equal, the higher a company's inventory turnover rate, the better. 7. All else being equal, a higher financial leverage will increase a company's debt rating and decrease the interest rate it must pay. 8. Vertical analysis examines changes in financial data across time. 9. A current ratio greater than 1.0 is generally desirable for a company. 10. Return on assets can be disaggregated into profit margin...
1. Sandhill, Inc., has net income of $14,964,000 on net sales of $348,000,000.The company has total...
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218 and the tax rate was 40 percent. If HighTech has no debt, what were Its...
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Data from the financial statements of Beautiful Candle Company included the following: Click the icon to...
Data from the financial statements of Beautiful Candle Company included the following: Click the icon to view the data.) Read the requirements. Requirements 1. Calculate the following ratios: a. Net profit margin; b. Asset turnover ratio, c. Leverage ratio, d. Return on assets (ROA); e. Return on equity (ROE). a. Begin by selecting the formula labels and then enter the amounts to calculate net profit margin. (Round your answer to one decimal place, X.X%.) = Net profit margin ratio %...
Hello, please advise, thank you #1 For the problem below: For Profit margin I got 2%...
Hello, please advise, thank you
#1 For the problem below: For Profit margin I got 2% and
it was right but debt to capital ratio I put 50% it was wrong and
1.63 was also wrong.
#2 I was lost here
#3 Is this right:
Assume the following relationships for the Caulder Corp.: Sales/Total assets 2x Return on assets (ROA) 4.0% Return on equity (ROE) 13.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and...
All things being equal, a decrease in the corporate tax rate will cause the company to...
All things being equal, a decrease in the corporate tax rate will cause the company to be financed with more debt. True False
All answers must be entered as formulas on excel CHAPTER 3 Saved Help Save & Exit Submit Shelton, Inc., has sale...
All
answers must be entered as formulas on excel
CHAPTER 3 Saved Help Save & Exit Submit Shelton, Inc., has sales of $17.5 million, total assets of $13.1 million, and total debt of $5.7 million. If the profit margin is 6 percent, what is net income? What is ROA? What is ROE? Sales Total assets Total debt Profit margin 17,500,000 13,100,000 5,700,000 6% Complete the following analysis. Do not hard code values in your calculations. Net income Return on assets...
please show how numbers are calculated. and all work must be done in excel CHAPTER 3:...
please show how numbers are calculated. and all work
must be done in excel
CHAPTER 3: FINANCIAL STATEMENT ANALYSIS TOOLS NOTE: PLEASE USE WORKSHEET #3 IN THE ATTACHED EXCEL FILE TITLED "Homework for Chapter 3 Excel TO SOLVE THE FOLLOWING PROBLEM. Homework for Chapter 3: Problem in the text (Chapter 3) Sweet Dreams Corp. Balance Sheet As of Dec. 31 2017 Assets 2017 2016 Cash 431,000 339,000 Accounts Receivable 503.000 365,000 Inventories 289,000 300,000 Total Current Assets 1.223,000 7,004,000 Sweet...
Profitability ratios reflect the net result of all the firm's erect. B policies and operating decisions. The profitability ratios include the: (1) Operating profit margin, (2) Net profit margin, (3) Return on total assets (ROA), (4) Basic earning power (BEP) ratio, and (5) Return on common equity (ROE). The operating profit margin indicates what percentage of sales remain after et B are accounted for. It is a measure of the firm's operating effidency. Its equation is: B. It measures the...
5. Highly leveraged firms have higher ROE than lower leveraged firms. 6. All things equal, the higher a company's inventory turnover rate, the better. 7. All else being equal, a higher financial leverage will increase a company's debt rating and decrease the interest rate it must pay. 8. Vertical analysis examines changes in financial data across time. 9. A current ratio greater than 1.0 is generally desirable for a company. 10. Return on assets can be disaggregated into profit margin...
218 and the tax rate was 40 percent. If HighTech has no debt, what were Its sales revenues in 2014? What was its 2014 net cash flow? Credit Card of America (CCA) has a current ra. tio of 3.5 and a quick ratio of 3.0. If its total current assets equal $73,500, what are CCA'S (a) current liabilities and (b) inventory? At the end of the year, Wrinkle Free Laundry (WFL) had $150,000 in total assets. (a) If WFL's total...
Data from the financial statements of Beautiful Candle Company included the following: Click the icon to view the data.) Read the requirements. Requirements 1. Calculate the following ratios: a. Net profit margin; b. Asset turnover ratio, c. Leverage ratio, d. Return on assets (ROA); e. Return on equity (ROE). a. Begin by selecting the formula labels and then enter the amounts to calculate net profit margin. (Round your answer to one decimal place, X.X%.) = Net profit margin ratio %...
Hello, please advise, thank you
#1 For the problem below: For Profit margin I got 2% and
it was right but debt to capital ratio I put 50% it was wrong and
1.63 was also wrong.
#2 I was lost here
#3 Is this right:
Assume the following relationships for the Caulder Corp.: Sales/Total assets 2x Return on assets (ROA) 4.0% Return on equity (ROE) 13.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and...
All
answers must be entered as formulas on excel
CHAPTER 3 Saved Help Save & Exit Submit Shelton, Inc., has sales of $17.5 million, total assets of $13.1 million, and total debt of $5.7 million. If the profit margin is 6 percent, what is net income? What is ROA? What is ROE? Sales Total assets Total debt Profit margin 17,500,000 13,100,000 5,700,000 6% Complete the following analysis. Do not hard code values in your calculations. Net income Return on assets...
please show how numbers are calculated. and all work
must be done in excel
CHAPTER 3: FINANCIAL STATEMENT ANALYSIS TOOLS NOTE: PLEASE USE WORKSHEET #3 IN THE ATTACHED EXCEL FILE TITLED "Homework for Chapter 3 Excel TO SOLVE THE FOLLOWING PROBLEM. Homework for Chapter 3: Problem in the text (Chapter 3) Sweet Dreams Corp. Balance Sheet As of Dec. 31 2017 Assets 2017 2016 Cash 431,000 339,000 Accounts Receivable 503.000 365,000 Inventories 289,000 300,000 Total Current Assets 1.223,000 7,004,000 Sweet...
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