1. Thomson Trucking has $21 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 13%, and its return on assets (ROA) is 5.25%. What is its times-interest-earned (TIE) ratio? Round your answer to two decimal places.

2 Pacific Packaging's ROE last year was only 4%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 50%, which will result in annual interest charges of $418,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,100,000 on sales of $11,000,000, and it expects to have a total assets turnover ratio of 3.3. Under these conditions, the tax rate will be 25%. If the changes are made, what will be the company's return on equity? Do not round intermediate calculations. Round your answer to two decimal places.

%

3

he Stewart Company has $2,480,500 in current assets and $868,175 in current liabilities. Its initial inventory level is $744,150, 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 dollar.

$

4. Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1 Days sales outstanding: 36.5 days^a Inventory turnover ratio: 5 Fixed assets turnover: 3.0 Current ratio: 2.5 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20% ^aCalculation is based on a 365-day year.

Do not round intermediate calculations. Round your answers to the nearest dollar.

Balance Sheet
Cash	$		Current liabilities	$
Accounts receivable			Long-term debt	75,000
Inventories			Common stock
Fixed assets			Retained earnings	105,000
Total assets	$300,000		Total liabilities and equity	$
Sales	$