Pioneer Inc. provided the following information on December 31, 2020

Total assets $120,000

Profit margin 6.0%

Tax rate 40%

Preferred stock $5 par $20,000

Equity multiplier 1 2/3

DSO 33 days

Interest rate 6.0%

Accounts payable $6,000

Total assets turnover 2.5

Instructions:

1. What is Pioneer Inc.s EBIT?

2. What is the book value per share assuming that the company has 30,000 shares of common stock outstanding throughout the year 2020?

3. What should management do based on the ratios given above?