Quantitative Problem: Rosnan Industries 2018 and 2017 balance sheets and income statements are shown below. Balance Sheets: 2018 2017 Cash and equivalents $120 $105 Accounts receivable 275 300 Inventories 375 350 Total current assets $770 $755 Net plant and equipment 2,000 1,490 Total assets $2,770 $2,245 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity $150 75 170 $395 450 1,225 700 $2,770 $85 50 195 $330 290 1,225 400 $2,245 Income Statements: 2018 2017 $1,500 1,000 $500 75 Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (40%) Net income $2,000 1,250 $750 100 $650 62 $585 235 $353 $425 45 $380 152 $228 Dividends paid Addition to retained earings $53 $300 $45 $180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 What is the firm's 2018 current ratio? Round your answer to two decimal places. If the industry average debt-to-total-assets ratio is 30%, then Rasnan's creditors have a Select cushion than indicated by the industry average. What is the firm's 2018 net profit margin? Round your answer to four decimal places. If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-total-assets ratio might be one reason for its high profit margin. What is the firm's 2018 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2018 ROE? Round your answer to two decimal places. 96 Quantitative Problem: Rosnan Industries 2018 and 2017 balance sheets and income statements are shown below. Balance Sheets: 2018 2017 Cash and equivalents $120 $105 Accounts receivable 275 300 Inventories 375 350 Total current assets $770 $755 Net plant and equipment 2,000 1,490 Total assets $2,770 $2,245 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity $150 75 170 $395 450 1,225 700 $2,770 $85 50 195 $330 290 1,225 400 $2,245 Income Statements: 2018 2017 $1,500 1,000 $500 75 Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (40%) Net income $2,000 1,250 $750 100 $650 62 $585 235 $353 $425 45 $380 152 $228 Dividends paid Addition to retained earings $53 $300 $45 $180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 What is the firm's 2018 current ratio? Round your answer to two decimal places. If the industry average debt-to-total-assets ratio is 30%, then Rasnan's creditors have a Select cushion than indicated by the industry average. What is the firm's 2018 net profit margin? Round your answer to four decimal places. If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-total-assets ratio might be one reason for its high profit margin. What is the firm's 2018 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2018 ROE? Round your answer to two decimal places. 96
