QUESTION 1 MAD Inc. has $100 million in total assets, $50 in total liabilities including $10 million in short-term debt and $20 million in long-term debt. What is MAD Inc's debt to total capital ratio?

30.0%

50.0%

37.5%

20.0%

QUESTION 2 (Net) Profit margin times total asset turnover equals which of the following?

Basic earning power

Return on assets

Return on invested capital

Return on equity

QUESTION 3 Assume a company's total assets equals its total invested capital and the company's debt to capital (and liabilities to assets) ratio is 75% What is the company's equity multiplier (assets/equity ratio)?

3

2

4

0.25