Question
Please help with this assignment: 1.Star Inc. has Year 1 revenues of $80 million, net income of $9 million, assets of $65 million, and equity
Please help with this assignment:
1.Star Inc. has Year 1 revenues of $80 million, net income of $9 million, assets of $65 million, and equity of $40 million, as well as Year 2 revenues of $87 million, net income of $22 million, assets of $70 million, and equity of $50 million. Calculate Star's return on equity (ROE) for each year based on the DuPont method and compare it with a direct ROE measure. Next, explain why the firm's ROE changed between Year 1 and Year 2.
2.Nextime Ltd. has operating profits (EBIT) of $87 million, a tax rate of 35%, net working capital of $129 million, and fixed assets of $285 million. Calculate Nextime's return on invested capital, or ROIC. Then, describe three methods by which a firm can increase its ROIC.
4.Fixem Co. has revenue of $125 million, property and equipment of $42 million, and accumulated depreciation and amortization of $6 million. Estimate the fixed asset turnover ratio.
5.Wally Wholesale has revenue of $487,000, end-of-year receivables of $112,000, account payables of $70,000, and inventory of $91,000. Assume purchases equal cost of sales of $372,000. Estimate Wally Wholesale's age of inventory, age of receivables, and age of payables.
6.Quick-E Inc.'s current assets consist of cash of $5 million, account receivables of $27 million, inventory of $37 million, and it has current liabilities of $48 million. Calculate Quick-E's current ratio and quick ratio.
7.Deb Co. has interest-bearing debt of $122 million, non-interest-bearing debt of $33 million, and equity of $76 million. Calculate Deb Co.'s debt-to-assets, debt-to-equity, and long-term debt-to-capital ratios.
8.IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments of $17,000, and a tax rate of 35%. Calculate IOU Inc.'s interest coverage ratio and debt service coverage ratio.
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