Problem 9-13

Two firms have sales of $1.5 million each. Other financial information is as follows:

FirmABEBIT$290,000$290,000Interest expense40,00055,000Income tax60,00035,000Debt2,440,0003,330,000Equity1,360,0001,670,000

What are the operating profit margins and the net profit margins for these two firms? Round your answers to two decimal places.

Operating profit margins:

Firm A: %

Firm B: %

Net profit margins:

Firm A: %

Firm B: %

What are their returns on assets and on equity? Round your answers to two decimal places.

Return on assets:

Firm A: %

Firm B: %

Return on equity:

Firm A: %

Firm B: %