ot o s - . (Related to Checkpoint 4.3) {Analyzing Profitability) In 2016, the Allen Corporation had sales of $70 million, total assets of 543 million, and total liabilities of 317 million. The interest rate on the company's debt is 5.5 percent, and its tax rate is 35 percent. The operating profit margin is 13 percent. a. Compute the firm's 2016 nat operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) - - a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $|:| million. {Round to two decimal places.) (DuPont analysis) Triangular Chemicals has total assets of $102 million, a return on equity of 38 percent, a net profit margin of 4.8 percent, and an equity multiplier of 2.75. How much are the firm's sales? - _ The company's total sales are 3| | million. (Round to one decimal place.) (Market value analysis) The balance shest for Larry Underwood Motors shows a book value of stockholders' equity (book value per share = total shares outstanding) 0f 51,383,000, Furthermeore, the firm's income statement for the year just ended has a netincome of 5555,000, which is $0.313 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 20.74. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares? - a. What price would you expect Underwood Motors shares to sell for? The market price per share is $|:|. (Round to the nearest cent.) J. P. Robard Mfg., Inc. Balance Sheet (S000) Cash 5490 Accounts receivable 2,040 Inventories 1,060 Current assets $3,590 Met fixed assets 4,590 Total assets $6.,180 Accounts payable $1,060 Accrued expenses 560 Short-term notes payable 350 Current liabilities $1,970 Long-term debt 2,060 Owners' equity 4,150 Total liabilities and owners' equity 36,160 (Click on the icon T in order to copy its contents info a spreadsheet ) J. P. Robard Mfg., Inc. Income Statement ($000) Net sales (all credit) 57,920 Cost of goods sold (3,360) Gross profit 34,560 Operating expenses (includes (3.100) 5500 depreciation) o MNet operating income 51,460 Interest expense (365) Earnings before taxes $1.095 (Click on the icon 0 in order o copy its contents info a spreadsheet.) J. P. Robard Mfg., Inc. Income Statement ($000) Net sales (all credit) $7.920 Cost of goods sold {3,360) Gross profit 34,560 Operating expenses (includes . $500 depreciation) (3.100) Net operating income 31,460 Interest expense (365) Earnings before taxes 31,095 Income taxes (40%) (438) Net income 3657 (Click on the icon O in order to copy its contents info a spreadsheet.) (Capital structure analysis) The Karson Transport Company currently has net operating income of 5510,000 and pays interest expense of $194,000. The company plans to borrow $1.02 million on which the firm will pay 11 percent interest. The borrowed meney will be used to finance an investment that is expected to increase the firm's net operating income by 5391,000 a year. a. What is Karson's times interest earmned ratio before the loan is taken out and the investment is made? b. What effect will the loan and the investment have on the firm's times interest earned ratio? a. What is Karson's times interest earned ratio before the loan is taken out and the investment is made? The times interest earned ratio is D times. (Round to two decimal places.)