$11.($Based on End$-$of$-$chapter numerical problems $6\mathrm{.}3-6\mathrm{.}4)$ Solve the following problems related to a

firm$$s income statement.

a$.$ Molteni Motors Inc. recently reported $$6$ million of net income. Its EBIT was $$13$ million, and its

tax rate was $40\%.$ What was its interest expense?

b$.$ Talbot Enterprises recently reported an EBITDA of $$8$ million and net income of $$2\mathrm{.}4$ million. It

had $$2\mathrm{.}0$ million of interest expense, and its corporate tax rate was $40\%.$ What was its charge for

depreciation and amortization?

$12.$ Why is it necessary to first compute financial ratios to analyze financial statements? Financial ratio

analysis is conducted by managers, equity investors, long$-$term creditors, and short$-$term creditors.

What is the primary emphasis of each of these groups in evaluating ratios?

$13.$ Please answer the following questions regarding liquidity and solvency ratios $$ both of which help

determine the ability of a firm to repay its obligations.

a$.$ Identify two ratios to use to analyze a firm$$s liquidity position, and write out their equations.

b$.$ Define and distinguish between operating and cash cycles. How would you use these measures

to analyze a firm$$s liquidity position?

c$.$ What are the characteristics of a liquid asset? Give some examples. Which current asset is

typically the least liquid?

d$.$ What are the two types of ratios used to measure a firm$$s solvency? Write out their equations.

e$.$ How are operating returns different from stock returns even for a firm with no debt?

$14.$ Answer the following questions regarding default risk.

a$.$ Firm A is liquid but not solvent. Firm B is solvent but not liquid. Which firm is more likely to be

subject to default? Explain.

b$.$ Asset efficiency and profit margins rations impact solvency ratios. Explain $($including which

specific efficiency and profitability rations matter$).$

c$.$ Altman Z$-$score measures default risk of a firm. Enumerate the four factors affect the Z$-$score and

explain why each would impact default risk $($including whether it affects solvency or liquidity risk$).$

$15.$ Please answer the following questions regarding the differences between various measures of a

firm$$s debt.

a$.$ What is the difference between debt$-$to$-$asset ratio $($debt ratio$)$ and market debt ratio? The

difference between debt$-$to$-$asset ratio $($debt ratio$)$ and liability$-$to$-$asset ratio? In answering these

questions, explain the differences between their calculations and more importantly, differences

between what they tell us$?$

b$.$ Should leverage be computed based on book values $($i$.$e$.,$ debt$-$to$-$asset ratio or debt ratio$)$ or

market values $($market debt ratio$)?$ Explain.

$16.$ Answer the following questions regarding efficiency, profitability, and ROA:

a$.$ What do asset efficiency ratios measure? What is the main $($bottom line$)$ ratio? What are the

other common asset efficiency ratios? What additional information do these ratios provide?

b$.$ What do profitability ratios estimate? What is the main $($bottom line$)$ ratio? What are the other

common profitability ratios? What additional information do these ratios provide?

c$.$ Define ROA and using its formula derive mathematically the relationship between ROA, Asset

Efficiency, and Profitability.

d$.$ Over the past year, M$.$ D$.$ Ryngaert & Co$.$ has realized an increase in its current ratio and a drop

in its total assets turnover ratio. However, the company$$s sales, quick ratio, and fixed assets

turnover ratio have remained constant. What explains these changes? How will these changes

affect ROA assuming profit margin remains unchanged?

$17.$ Answer the following questions regarding ROE

a$.$ Define ROE and using its formula derive mathematically the DuPont Identity.

b$.$ What are the factors affecting ROE as per the DuPont Identity?

c$.$ Does increasing leverage $($debt$-$equity ratio$)$ increase expected ROE? Explain.

d$.$ If yes, should all firms enhance debt to maximize stockholder returns and wealth? Explain

e$.$ Profit margins and turnover ratios vary from one industry to another. What differences would you

expect to find between a grocery chain and a steel company? Think particularly about the

turnover ratios, the profit margin, and the DuPont equation.

These are practice questions if you can help me anser them that would be great