Debt Ratio and Du Pont analysis
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2- Debt ratio Bartley Barstools has an equity multiplier of 2.4, and its assets are financed with some combination of long- term debt and common equity. What is its debt ratio?
3-Du Pont analysis Doublewide Dealers has an ROA of 10 percent, a 2 percent profit margin, and an ROE of 15 percent. What is its total assets turnover? What is its equity multiplier?
5-Price/earnings ratio A company has an EPS of $ 2.00, a cash flow per share of $ 3.00, and a price/ cash flow ratio of 8.0 . What is its P/ E ratio?
6-Du Pont and ROE A firm has a profit margin of 2 percent and an equity multiplier of 2.0. Its sales are $ 100 million and it has total assets of $ 50 million. What is its ROE?
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This solution is comprised of a detailed explanation to compute the debt ratio, equity multiplier, P/E ratio, and ROE.
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2- Debt ratio Bartley Barstools has an equity multiplier of 2.4, and its assets are financed with some combination of long- term debt and common equity. What is its debt ratio?
Equity Multiplier = Total Assets/Shareholders' Equity
Assets = Debt + Equity
Equity Multiplier = (Debt + Equity)/Equity
2.4Equity = Debt + Equity
Debt = 1.4Equity
Debt ratio = Total Debt/Total Assets
= ...
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