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Du Pont Analysis,Debt, PE Ratio, BEP,ROE

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?

7-Duval Manufacturing recently reported the following information: Net income $ 600,000 ROA 8% Interest expense $ 225,000 Duval's tax rate is 35%. What is its basic earning power ( BEP)?

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Solution Preview

Check the formula in each point and then apply the correct formula. E=Equity, TA=Total Asset, D=Debt, NI=Net Income,S=Sales, EM=Equity Multiplier

2) EM = TA/E and TA=E+D solving this 2 equations will give you D in terms of equity which D=1.4E
Debt Ratio = D/TA = ...

Solution Summary

The solution computes Debt ratio, Du Pont Analysis, Price/earnings ratio;Du Pont and ROE;basic earning power in given scenario along with the formulae.