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Financial statement analysis (Company A & B)

Please help with the questions below: I am so lost. Please provide explanation as well.

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Use the following to answer questions 43-45:

Below is information for year ended 12/31/09 for Company A and Company B.

Company A Company B
Operating Inc. before $ 1000 $ 1000
Taxes and Interest
Interest Expense 400 0
Total assets - 12/31/09 10,000 10,000
Total debt 5,000 0
Equity 5,000 10,000
Tax Rate 40% 40%

43. Return on total assets for Company A and B for 2009 are (use NOPAT):

Company A Company B
A) 6% 6%
B) 8.4% 6%
C) 10% 10%
D) 14% 10%

44. ROE for Company A and B for 2009 are:

Company A Company B
A) 2.0% 2.0%
B) 3.6% 4.0%
C) 7.2% 6.0%
D) 8.6% 10%

45. Times interest earned ratio for Company A is:
A) 2.5
B) 2.6
C) 4.0
D) 4.2

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ANSWERS
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Question 43
NOPAT = operating income x (1 - tax rate)
Return on total assets = NOPAT/total ...

Solution Summary

Financial statement analysis for Company A & B are examined.

$2.19