Question

Problem 3-8 Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.7 Return on assets (ROA) 4% Return on equity (ROE) 8%

1.Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. %

2.Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. %

3.Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. %

Answer 1

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w 2 v 1* 5 ENG 02:36 10.02.2020 24 DU439 - X fix DPDQ DR DS DIDUDV DWDXDYDZA 438 439 440 441 HASLAM 442 443 444 ROE = ROA X EQUITY MULTIPLIER 8% = 4% X EQUITY MULTILIER EQUITY MULTIPLIER = 8%/4% = 2.0000 448 449 450 ROE = PROFIT MARGIN X ASSETS TURNOVER X EQUITY MULTIPLIER ROE = PROFIT MARGIN X (SALES/ASSETS) X 2 ROE = PROFIT MARGIN X 1.7 X 2 8% = PROFIT MARGIN X 1.7 X 2 PROFIT MARGIN = 2.35% ANS 1 452 EQUITY MULTIPLIER = TOTAL ASSETS/EQUITY 2 = TOTAL ASSETS/EQUITY SO TOTAL LIABILITIES = TOTAL ASSETS - EQUITY TOTAL LIABILITIES = 2-1 = 1 LIABILITIES TO ASSETS RATIO = 1/2 = ANS 2 50.00% 459 460 461 462 IF HALF OF THE LIABILITIES ARE IN THE FORM OF DEBT DEBT = 1/2 =0.5 DEBT TO ASSETS RATIO = 0.5/2 = ANS 3 25.00% ... CASH BUDGET budget 45 days cycle ROE, BV MV ratio VARIANCE BEP, OL FL ratios DETROIT float B-S profit loss SALES BUDGET dupont ... :