Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. DuPont Analysis Doublewide Dealers has an ROA of 7%, a 6% profit margin, and an ROE of 16%. What is its total assets turnover?

1. DuPont Analysis Doublewide Dealers has an ROA of 7%, a 6% profit margin, and an ROE of 16%. What is its total assets turnover? Round your answer to two decimal places. ________ What is its equity multiplier? Round your answer to two decimal places. ________

2. Market/Book Ratio

Jaster Jets has $19 billion in total assets. Its balance sheet shows $0.95 billion in current liabilities, $9.5 billion in long-term debt, and $8.55 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $39 per share. What is Jaster's market/book ratio? Round your answer to two decimal places.

________ x

3. M/B and Share Price

You are given the following information: Stockholders' equity = $6.5 billion, price/earnings ratio = 10.5, common shares outstanding = 14 million, and market/book ratio = 2.5. Calculate the price of a share of the company's common stock. Round your answer to the nearest cent.

$ ________

4. Return on Equity

Midwest Packaging's ROE last year was only 4%; but its management has developed a new operating plan that calls for a debt-to-assets ratio of 40%, which will result in annual interest charges of $252,000. The firm has no plans to use preferred stock. Management projects an EBIT of $777,000 on sales of $7,000,000, and it expects to have a total assets turnover ratio of 2.9. Under these conditions, the tax rate will be 30%. If the changes are made, what will be the company's return on equity? Round your answer to two decimal places.

________ %

5. Current Ratio

The Petry Company has $1,848,000 in current assets and $757,680 in current liabilities. Its initial inventory level is $517,440, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0? Round your answer to the nearest cent.

$ ________

6. DSO and Accounts Receivable

Harrelson Inc. currently has $905,000 in accounts receivable, and its days sales outstanding (DSO) is 59 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year. Round your answer to the nearest cent.

$ ________

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance In America An Unfinished Story

Authors: Kevin R. Brine, Mary Poovey

1st Edition

022650204X, 978-0226502045

More Books

Students also viewed these Finance questions