TIE AND ROIC RATIOS The H.R. Pickett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $2 million, its average tax rate is 30%, and its profit margin is 5%. What are its TIE ratio and its return on invested capital (ROIC)?

AppendixLO1