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Compute ROA, ROE and ROFL and Interpret the Effects of Leverage Basic income statement and balance sheet information is given below for six different cases.
Compute ROA, ROE and ROFL and Interpret the Effects of Leverage
Basic income statement and balance sheet information is given below for six different cases. For each case, the assets are financed with a mix of noninterestbearing liabilities, interestbearing liability and stockholders' equity.
Case A B C D E F
Average assets $ $ $ $ $ $
Noninterest bearing liabilities
Interestbearing liabilities
Average shareholders' equity
Earnings before interest and taxes EBIT
a For each case, calculate the return on equity ROE return on assets ROA and return on financial leverage ROFL In all cases, the income tax rate is
Round answers to one decimal place ie
Use negative signs with answers, when appropriate.
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