Homework Answers
Q9.
Answer is C. Increase in equity multiplier.
Explanation: Increase in equity multiplier means the increase in proportion of debts in the total assets of the business which make the business more riskier.
Q10.
Answer is D. S7P P/E is above historic average.
Explanation: When P/E ratio is above average means the stock is priced at higher price.
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9. Wh A. Increases in profit margin B. Increases in total asset turnover. C. Increases in...
Which of the follow affects ROE? a. Net Profit Margin b. Total Asset Turnover c. Equity...
Which of the follow affects ROE? a. Net Profit Margin b. Total Asset Turnover c. Equity Multiplier (leverage) d. A, B and C e. A and B
2.5 Stephanie, Inc. has a profit margin of 9 percent, total asset turnover of 1.5, and...
2.5 Stephanie, Inc. has a profit margin of 9 percent, total asset turnover of 1.5, and ROE of 17.20 percent. What is this firm's debt-equity ratio? 2.6 For the past year, David, Inc. had a cost of goods sold of $18,364. At the end of the year, the accounts payable balance was $4,205. a. (6 points) How long on average did it take the company to payoff its suppliers during the year? b. (4 points) What might a large value...
Return on assets equals: Profit margin × Inventory turnover. B) Gross profit ratio × Asset turnover. C) Gross profit ratio × Inventory turnover. D) Profit margin...
Return on assets equals: Profit margin × Inventory turnover. B) Gross profit ratio × Asset turnover. C) Gross profit ratio × Inventory turnover. D) Profit margin × Asset turnover. 33.If your employer declares bankruptcy, this can have a major effect on your pension if you are in a Either plan B) Defined Benefit Plan C) Neither Plan D) Defined Contribution Plan 37If you put $200 into a savings account that pays annual compound interest of 8% per year and then...
Return on assets equals: Profit margin × Inventory turnover. B) Gross profit ratio × Asset turnover....
Return on assets equals: Profit margin × Inventory turnover. B) Gross profit ratio × Asset turnover. C) Gross profit ratio × Inventory turnover. D) Profit margin × Asset turnover. 33.If your employer declares bankruptcy, this can have a major effect on your pension if you are in a Either plan B) Defined Benefit Plan C) Neither Plan D) Defined Contribution Plan 37If you put $200 into a savings account that pays annual compound interest of 8% per year and then...
1. A firm s _____ added to its _____ equals 1.0. a. earnings per share, PE ratio...
1. A firm s _____ added to its _____ equals 1.0. a. earnings per share, PE ratio b. ROA, ROE c. growth rate, net income d. payout ratio, plowback ratio 2. Amuzon Corp. is currently selling for $30/share and recently reported annual earnings of $2 million, 1 million shares outstanding, and forecasted earnings/share of $2.50 next year. Amuzon Corp.'s trailing P/E ratio is: a. 15 b. 12 c. 30 d. 6.67% 3. If the PE of a broad market index is below the historical average PE, an investor might...
With a Total Asset Turnover of 1.25X in 2018 for MEC Cor with no debt it...
With a Total Asset Turnover of 1.25X in 2018 for MEC Cor with no debt it generated sales of $15m. Its Basic Earning Power was 15%. With Corp. Taxes @35% Its ROE would be: Select one: a. 10.75% b. 8.5% c. 12.5% d. 9.75% e. None of the Above
For fiscal year 2017, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset...
For fiscal year 2017, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset turnover of 3.55, and a book equity multiplier of 3.37. In the same fiscal year, Walmart Inc. had a ROE of 30.05%, a ROA of 15.20%, and a book value of equity of $1.8 Billion. a) Use this data to compute Costco's ROE using the DuPont Identity. [1 point] b) What is Walmart's book value of assets? What is Walmart's book debt-to-equity ratio? (assume...
Total Asset Turnover for XBM with no debt in 2018 was 2.5X on assets of $20m....
Total Asset Turnover for XBM with no debt in 2018 was 2.5X on assets of $20m. Its Basic Earning Power was 15%. With Corp. Taxes @35% Its ROE would be: Select one: a. 9.50% b. 10.75% c. None of the Above d. 9.75% e. 12.25%
Suppose a company has an ROE of 28.6 percent, total asset turnover ratio of 1.4 and...
Suppose a company has an ROE of 28.6 percent, total asset turnover ratio of 1.4 and equity multiplier of 01.75. If the average profit margin for other firms in the same industry is 16.40 percent, how much is this firm operating at below industry standards?(Express as a percentage to the nearest hundredth) What annual rate of return is earned on a $8,950 investment that grows to $19,765 in eight years? A.10.05% B.10.41% C.11.09% D.11.73% E.12.29% .Assume you borrow $500 from...
11) Consider a retail firm with a net profit margin of 3.5%, a total asset turnover...
11) Consider a retail firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million. a. What is the firm's current ROE? b. How does it compare with Macy's data for 2018? c. If the firm increased its net profit margin to 4%, what would its ROE be? CIS, C . CONSOLIDATED STATEMENTS OF INCOME (millions, except per share data) 2018 24,971 $...
2.5 Stephanie, Inc. has a profit margin of 9 percent, total asset turnover of 1.5, and ROE of 17.20 percent. What is this firm's debt-equity ratio? 2.6 For the past year, David, Inc. had a cost of goods sold of $18,364. At the end of the year, the accounts payable balance was $4,205. a. (6 points) How long on average did it take the company to payoff its suppliers during the year? b. (4 points) What might a large value...
For fiscal year 2017, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset turnover of 3.55, and a book equity multiplier of 3.37. In the same fiscal year, Walmart Inc. had a ROE of 30.05%, a ROA of 15.20%, and a book value of equity of $1.8 Billion. a) Use this data to compute Costco's ROE using the DuPont Identity. [1 point] b) What is Walmart's book value of assets? What is Walmart's book debt-to-equity ratio? (assume...
11) Consider a retail firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million. a. What is the firm's current ROE? b. How does it compare with Macy's data for 2018? c. If the firm increased its net profit margin to 4%, what would its ROE be? CIS, C . CONSOLIDATED STATEMENTS OF INCOME (millions, except per share data) 2018 24,971 $...
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