ANALYSIS OF FINANCIAL STATEMENTS 3-13 Calculate the market value ratios, that is, the price/earnings ratio, the price/cash flow ratio, and the market/book value ratio. Roberts had an average of 10,000 shares outstanding during 2000, and the stock price on December 31, 2000, was $40.00. a. 4.21: 2.00; 0.36 d. 4.76: 2.44; 1.54 b. 3.20; 1.75: 1.54 e. 4.76; 2.44; 0.36 c. 3.20: 2.44; 0.36 10. Use the extended Du Pont equation to determine Roberts' return on equity. a. 6.90% b. 7.24% c. 7.47% d. 7.60% e. 8.419 it. Lewis Inc. has sales of $2 million per year, all of which are credit sales. Its days sales outstanding is 42 days. What is its average accounts receivable balance? a $233,333 b. $266,667 c. $333,333 d. $350,000 e. $366,667 12. Southeast Jewelers Inc, sells only on credit. Its days sales outstanding is 60 days, and its average accounts receivable balance is $500,000. What are its sales for the year? a. $1,500,000 b. $3,000,000 c. $2,000,000 d. $2,750,000 e $3,225,000 A firm has total interest charges of $20,000 per year, sales of $2 million, a tax rate of 40 percent, and a profit margin of 6 percent. What is the firm's times-interest-earned ratio? 13. a. 10 b. 11 c. 12 d. 13 e. 14 14. Refer to Self-Test Problem 13. What is the firm's TIE, if its profit margin decreases to 3 percent and its interest charges double to $40,000 per year? a. 3.0 b. 2.5 c. 3.5 d. 4.2 e. 3.7 15. A fire has destroyed many of the financial records at Anderson Associates. You are assigned to piece together information to prepare a financial report. You have found that the firm's return on equity is 12 percent and its debt ratio is 0.40. What is its retum on assets ? a. 4.90% b. 5.35% c. 6.60% d. 7.20% e. 8.40%