Balance Sheets, Dec. 31 Income Statement 2012 2011 A Period: 1/01/2012 - 12/31/2012 Cash A/R 700 400 200 Inventories Total CA Gross FA Less: Dep. Net FA Total Assets 900 800 600 2300 2400 500 1900 4200 200 400 400 1000 1400 200 1200 2200 1000 300 700 Sales COGS Deprec. & Amort Other Expenses EBIT Interest Expense EBT Taxes Net Income 3000 1350 300 240 1110 60 1050 300 750 300 300 100 200 0 500 Accts Payable Notes Payable Accruals Total CL Long-Term Debt Common Stock Retained Earnings Total Equity Total L & E 600 100 700 1400 1000 1000 800 1800 4200 No. CS Shares EPS DPS Stock Price 100 $7.50 $1.50 $39 600 600 0 400 1000 200 1200 2200 600 Tax Rate = 300/1050 3) Do you rate the quality of the XYZ reported Net Income to be a. Better than its cash-flow b. Funny c. Very poor d. Exceptionally good e. Worse than its cash-flow The XYZ operation during 2012 affected the owners as follows: a. Doubled their wealth b. Positively c. Negatively d. XYZ is going bankrupt e. We have no relevant information The MVA of XYZ is: a. 1000 b. 4000 c. 1600 d. 2100 e. 1200 a b. c. d. e. The Net Profit Margin of XYZ is: 0.2 0.25 0.31 0.27 0.22 The Total Assets Turnover Ratio of XYZ is: a. 0.214 b. 0.7143 C. 2 d. 0.7 e. 0.5 Financial leverage magnified the ROE of XYZ. Assuming zero financial leverage, the ROE would have been: a. 0.312 b. 0.257 c. 0.179 d. 0.125 e. 0.167