Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Keystone Resources has a net profit margin of 9 percent and earnings after taxes of $2.0 million. Its current balance sheet is as follows:

  

Keystone Resources has a net profit margin of 9 percent and earnings after taxes of $2.0 million. Its current balance sheet is as follows: Current assets Fixed assets Total assets $7,000,000 Current liabilities 10,000,000 Long-term debt $17,000,000 Common stock Retained earnings Total liabilities and stockholders' equity $3,500,000 5,600,000 2,800,000 5,100,000 $17,000,000 a. Calculate Keystone's return on stockholders' equity. Round your answer to two decimal places. b. Industry average ratios are Net profit margin Total asset turnover Equity multiplier 10% 1.0 times 1.1 times Compare Keystone's net profit margin, total asset turnover, and equity multiplier to these averages. Round your answers to two decimal places. c. Keystone has inventories of $3.1 million. Compute the firm's quick ratio. Round your answer to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Financial Management

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

10th Edition

978-0324289114, 0324289111

More Books

Students also viewed these Finance questions

Question

i need correct answrrs 4 2 2 . CSTR .

Answered: 1 week ago

Question

What is management growth? What are its factors

Answered: 1 week ago