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Last year, Marly Brown, Inc., reported an ROE of 22 percent. The firms debt-to-equity was 1.5 times, sales were $21.3 million, the capital intensity was
Last year, Marly Brown, Inc., reported an ROE of 22 percent. The firms debt-to-equity was 1.5 times, sales were $21.3 million, the capital intensity was 1.25 times, and dividends paid to common stockholders were $1,130,000. The firm has no preferred stock outstanding. This year, Marly Brown plans to decrease its debt-to-equity ratio to 1.3 times. The change will not affect sales, total assets, or dividends paid, however, it will reduce the firms profit margin to 10.50 percent.
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