Which type of Profit (EBIT or PAT or some other) that we use to calculate Return...
Which type of Profit (EBIT or PAT or some other) that we use to calculate Return on Capital employed and why?
Homework Answers
Return on Capital employed (ROCE) measures the efficiency of a company to generate profits from its capital employed. It can be calculated as
EBIT / Capital Employed
While measuring the efficiency, it is the net operating profit which matters, that is how much the company earns from its operations alone. EBIT can be calculated by subtracting the operating expenses from gross profit. Or it can be calculated by adding interest and taxes to PAT.
ROCE measures how much profit is earned by a company from each penny invested. Higher ROCE is more favorable.
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Which type of Profit (EBIT or PAT or some other) that we use to calculate Return...
a. Debt Ratio 0% EBIT $ Less: Interest $ EBT $ Taxes @40% $ Net profit...
a.
Debt Ratio
0%
EBIT
$
Less: Interest
$
EBT
$
Taxes @40%
$
Net profit
$
Less: Preferred
dividends
$
Profits available to
common stockholders
$
# shares outstanding
$
EPS
$
Calculate the EPS below: (Round to the nearest dollar. Round
the EPS to the nearest cent.)
Debt Ratio
15%
EBIT
$
Less: Interest
$
EBT
$
Taxes @40%
$
Net profit
$
Less: Preferred
dividends
$
Profits available to
common stockholders
$
# shares outstanding
$...
Please use the given information to calculate the amount of life insurance Pat should get, using...
Please use the given information to calculate the amount of
life insurance Pat should get, using the Capital Retention
Approach. Please show all calculations and use your own work,
thanks!
Pat estimates that $60,000 is seen as sufficient wealth to meet his family's needs after his death. Currently, the family has $800,000 total assets, including bank saving, securities investment, house, cars, etc. The family currently has $220,000 total liability (e.g., mortgage payoff, auto loan, credit card balance), $135,000 cash needs...
6 Which financial leverage ratio is used with two other ratios to mathematically produce the return...
6 Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio? Debt/ Equity Total Liabilities/(Equity - Intangible Assets) Total Assets/ Equity Total Liabilities/Equity 17 Which of the following is a tertiary ratio that drives profitability? SG&A Expense/Sales Net Profit/Sales EBIT /Sales EBIT /Net Profit 18 Which ratios indicate how efficiently the company is in generating sales from the company's assets? Net profit ratio Solvency ratio Quick asset ratio Working capital turnover 19...
I heard that we use electronic equipment because electric energy is effient than other enery type. Then Why is that ele...
I heard that we use electronic equipment because electric energy is effient than other enery type. Then Why is that electric energy has better conversion efficient thant other energy type ( heat energy..)
Pat is 68-years old, single, and of German decent. Pat arrived on time to our meeting,...
Pat is 68-years old, single, and of German decent. Pat arrived on time to our meeting, but appeared disheveled. An apology was made for missing last week’s initial appointment and it was admitted that a chauffeur had escorted Pat today. The flow of conversation was often interrupted and thoughts often wandered from the conversation during this intake interview. Pat reported primarily episodes of forgetting mundane things and being overly distracted. Other complaints included loss of appetite and disrupted sleep patterns....
There are many other settings in which we can ask questions related to some type of...
There are many other settings in which we can ask questions related to some type of "stability" principle. Here's one, involving competition between two enterprises. Suppose we have two television networks, whom we'll call A and D. There are n prime-time programming slots, and each network has n TV shows. Each network wants to devise a schedule-an assignment of each show to a distinct slot-so as to attract as much market share as possible. Here is the way we determine...
Which type of alliance might work best for a not-for-profit organization? For a for- profit organization?...
Which type of alliance might work best for a not-for-profit organization? For a for- profit organization? Why?
When computing economic profit, we assume that capital earns a: O A Zero rate of return....
When computing economic profit, we assume that capital earns a: O A Zero rate of return. O B Average rate of return O C Risk-free rate of return D Positive rate of return. E None of the answers above is correct. Docum
which of the following statements is false? A. The realized return is the total return we...
which of the following statements is false? A. The realized return is the total return we earn from dividends and capital gains, expressed as a percentage of the initial stock price. B. The expected return is the return that actually occurs over a particular time period. C. The average annual return of an investment during some historical period is simply the average of the realized returns for each year. D. If you hold the stock beyond the date of the...
Use the information below to calculate the firm's return on common equity. Net profit margin =...
Use the information below to calculate the firm's return on common equity. Net profit margin = 12.56%; Debt ratio = 40.16%; Fixed asset turnover = 6; Total asset turnover = 2.6; Inventory turnover = 15.78.
a.
Debt Ratio
0%
EBIT
$
Less: Interest
$
EBT
$
Taxes @40%
$
Net profit
$
Less: Preferred
dividends
$
Profits available to
common stockholders
$
# shares outstanding
$
EPS
$
Calculate the EPS below: (Round to the nearest dollar. Round
the EPS to the nearest cent.)
Debt Ratio
15%
EBIT
$
Less: Interest
$
EBT
$
Taxes @40%
$
Net profit
$
Less: Preferred
dividends
$
Profits available to
common stockholders
$
# shares outstanding
$...
Please use the given information to calculate the amount of
life insurance Pat should get, using the Capital Retention
Approach. Please show all calculations and use your own work,
thanks!
Pat estimates that $60,000 is seen as sufficient wealth to meet his family's needs after his death. Currently, the family has $800,000 total assets, including bank saving, securities investment, house, cars, etc. The family currently has $220,000 total liability (e.g., mortgage payoff, auto loan, credit card balance), $135,000 cash needs...
6 Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio? Debt/ Equity Total Liabilities/(Equity - Intangible Assets) Total Assets/ Equity Total Liabilities/Equity 17 Which of the following is a tertiary ratio that drives profitability? SG&A Expense/Sales Net Profit/Sales EBIT /Sales EBIT /Net Profit 18 Which ratios indicate how efficiently the company is in generating sales from the company's assets? Net profit ratio Solvency ratio Quick asset ratio Working capital turnover 19...
There are many other settings in which we can ask questions related to some type of "stability" principle. Here's one, involving competition between two enterprises. Suppose we have two television networks, whom we'll call A and D. There are n prime-time programming slots, and each network has n TV shows. Each network wants to devise a schedule-an assignment of each show to a distinct slot-so as to attract as much market share as possible. Here is the way we determine...
When computing economic profit, we assume that capital earns a: O A Zero rate of return. O B Average rate of return O C Risk-free rate of return D Positive rate of return. E None of the answers above is correct. Docum
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