Use the following data for Super Cool Auto Manufacturer, Inc. (Nasdaq: SCAM) to answer the following questions 1-10.

SCAM: Balance Sheet as of December 31, 20XX ($ Millions, except for the number of shares)
Cash	$200		Accounts payable	$150
Account receivables	400		Note payable	200
Inventories	600		Other current liabilities	250
Total current assets	$1,200		Total current liabilities	$600
Net fixed assets	2,800		Long-term debt	1,000
			Total liabilities	$1,600
			Common stock	1,000
			(100,000,000 shares)
			Retained earnings	1,400
			Total common equity	$2,400
Total assets	$4,000		Total liabilities and equity	$4,000

SCAM: Income Statement for Year Ended December 31, 20XX ($ Millions, except for per share data)
Sales		$5,500
Cost of goods sold		3,200
Selling, general, and administrative expenses		1,600
Earnings before interest and taxes (EBIT)		$700
Interest expense		100
Earnings before taxes (EBT)		$600
Federal and state income taxes (25%)		150
Net income		$450
Other information
Common stock price per share	$45.00
Expected growth rate of earnings	8.0%

1. (a) What is the firms net profit margin? (b) How do you interpret the ratio? Choose the correct one. A. The higher, the better. B. The lower, the better.

2. (a) What is the firms return on equity (ROE)? (b) How do you interpret the ratio? Choose the correct one. A. The higher, the better. B. The lower, the better.

3. (a) What is the firms return on invested capital (ROIC)? (b) How do you interpret the ratio? Choose the correct one. A. The higher, the better. B. The lower, the better.

4. (a) What is the firms equity multiplier? (b) How do you interpret the ratio in general? Choose the correct one. A. The higher, the better. B. The lower, the better.

5. (a) What is the firms long-term debt to equity ratio? (b) How do you interpret the ratio in general? Choose the correct one. A. The higher, the better. B. The lower, the better.

6. (a) What is the firms interest coverage ratio? (b) How do you interpret the ratio? Choose the correct one. A. The higher, the better. B. The lower, the better.

7. (a) What is the firms quick ratio? (b) How do you interpret the ratio excluding extreme cases? Choose the correct one. A. The higher, the better. B. The lower, the better.

8. (a) What is the firms price-to-earnings (P/E) ratio? (b) How do you interpret the ratio? Choose the correct one. A. All else equal, potential investors would prefer lower P/E. B. All else equal, potential investors would prefer higher P/E.

9. (a) What is the firms PEG ratio? (b) How do you interpret the ratio? Choose the correct one. A. All else equal, potential investors would prefer lower PEG ratio. B. All else equal, potential investors would prefer higher PEG ratio.

10.(a) What is the firms price-to-book value (P/B) ratio? (b) How do you interpret the ratio? Choose the correct one. A. All else equal, potential investors would prefer lower P/B ratio. B. All else equal, potential investors would prefer higher P/B ratio.