Question
Baker Industries net income is $25000, its interest expense is $6000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals
Baker Industries net income is $25000, its interest expense is $6000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals $75000, and common equity equals $255000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What are the firms ROE and ROIC?
Round your answers to two decimal places. Do not round intermediate calculations.
ROE ____%
ROIC ____% %
\begin{tabular}{l|c|} \hlineC & D \\ \hline \\ \hline & \\ \hline Formulas \\ \hline #N/A \end{tabular} Partial Income Statement: \begin{tabular}{lr} \hline EBIT & \\ \cline { 2 } Interest & $6,000.00 \\ \hline EBT & \\ \hline Taxes & $25,000.00 \\ \hline Net income & \\ & \\ Capital Summary: & \\ Notes payable & $25,000.00 \\ \hline Long-term debt & $75,000.00 \\ \hline Common equity & $255,000.00 \\ \hline Total invested capital & \\ \hline \end{tabular} #N/A #N/A #N/A #N/A #N/A
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started