Q1

Firm A and Firm B have debttotal asset ratios of 26 percent and 16 percent and returns on total assets of 7 percent and 12 percent, respectively.

What is the return on equity for Firm A and Firm B? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Firm A

Firm B

Return on equity

%

%

Q2

The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes):

Income Statement				Balance Sheet
Sales	$	8,200		Assets	$	24,600		Debt	$	12,000
Costs		5,860						Equity		12,600
Net income	$	2,340		Total	$	24,600		Total	$	24,600

Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next years sales are projected to be $9,102.

What is the external financing needed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

External financing needed

$

Q3

If Wilkinson, Inc., has an equity multiplier of 1.62, total asset turnover of 2.4, and a profit margin of 4.2 percent, what is its ROE? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

ROE

%