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use the above table to answer: Ignore taxes Operating assets Financial assets Operating liabilities Financial liabilities Equity FastCorp Slow Corp 170.00 150.00 30.00 20.00 40.00

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use the above table to answer:

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Ignore taxes Operating assets Financial assets Operating liabilities Financial liabilities Equity FastCorp Slow Corp 170.00 150.00 30.00 20.00 40.00 50.00 60.00 90.00 100.00 30.00 Net operating assets Invested capital Sales revenues Less: Operating expenses = Operating profit Plus: Interest income Less: Interest expense = Net income 600.00 560.00 40.00 1.50 6.00 35.50 300.00 280.00 20.00 1.00 9.90 11.10 ROI and its drivers Volume: Invested capital turnover (Sales/Invested capital] Margin: Operating profit margin % Return on invested capital Return on equity Analysis of leverage Interest expense rate: Interest expense/Financial liabilities Spread in %: ROIC - Interest expense rate Spread in $: Spread in % * Financial liabilities Spread in $/Equity: Boost to ROE because of financial liabilities Analysis of liquidity Interest income rate: Interest income/Financial assets Spread in %: ROIC - Interest income rate Spread in $: Spread in % * Financial assets Spread in $/Equity: Hit to ROE because of financial assets ROE = ROIC + Boost due to leverage - Hit due to liquidity Check Balance Sheet FastCorp SlowCorp NOA ROIC and its drivers Volume: Invested capital turnover [Sales/Invested capital: Show as a multiple but do not put an x at the end of the number.] Margin in %: [Enter 10.25% as 10.25] ROIC in % [Enter 10.25% as 10.25] The effect of leverage and liquidity on ROE ROE in % [Enter 10.25% as 10.25] Pre-tax Spread on Financial Liabilities in $ divided by Equity in $ [Show in %. Enter 10.25% as 10.25] [Positive number] Pre-tax Spread on Financial Assets in $ divided by Equity in $ [Show in %. Enter 10.25% as 10.25] [Positive number]

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