Question
Below are some selected ratios for C Corp, a leading manufacturer and seller of citrus fruits and juices in Orange County . Based on these
Below are some selected ratios for C Corp, a leading manufacturer and seller of citrus fruits and juices in Orange County . Based on these ratios, please answer the following questions.
Current Ratio | 2.5 | Total Asset Turnover | 0.75 |
Quick Ratio | 0.67 | Debt Ratio | 0.50 |
DSO | 30 days | Profit Margin | 5% |
Inventory Turnover | 3x | Average profit margin for citrus industry Firms optimal debt ratio | 4.8%
50% |
What is the ROE for C Corp?
The company wants to keep its optimal debt ratio, so they will not choose to finance more with debt. Based on the information above, how could Mmmm!Citrus Corp increase its ROE? (Hint: Try to identify a weakness of the companys ratios. Then try to identify which component of the ROE could be improved by strengthening this point.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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