Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $320,000 and its net income was $10,600. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $10,250 without changing its sales, assets, or capital struc
Last year Kruse Corp had $355,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the
1.The ________ measures the return on owners' (both preferred and common stockholders) investment in the firm. 1. 1. return on total assets 2. 2. price/earnings ratio 3. 3. return on equity 4. 4. net profit margin 2.If Nico Corporation has annual purchases of $300,000 and accounts payable of $30,000, then av
See attached file. Carter Corporation had net income of $250,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2008. Carter Corporation's common stockholders' equity at the beginning and end of 2008 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average s
Debt ratio Bartley Barstools;Du Pont analysis Doublewide Dealers;Price/earnings ratio;Du Pont and ROE;basic earning power
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 turnove
The Bowley Company manufactures several different products. Unit costs associated with product ICT101 are as follows: Direct materials $60; Direct labor $10; Variable support costs $18; Fixed manufacturing support costs $32; Sales commissions (2% of sales) $4; Administrative salaries $16; Total Costs $140.Total variable costs as
What is the importance of internal equity vs external compensation equity to an employer and an employee? What are the advantages and disadvantages of both to a company? As a manager, how can you ensure internal and external equity in the workplace?
1. The capital asset pricing model (CAPM) contends that there is systematic and unsystematic risk for an individual security. Which is the relevant risk variable and why is it relevant? Why is the other risk variable not relevant? 2 a. You expect an RFR of 10 percent and the market return (RM) of 14 percent. Compute the expec
You have been given the attached information on the Crum Company. Crum expects sales to grow by 25 percent in 2007 and operating costs should increase in proportion to sales. Fixed assets were being operated at 70 percent of capacity in 2006, but all other assets were used to full capacity. Underutilized fixed assets cannot be
Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt--HD has more debt and pays a higher interest rate on that debt. Based on the data given below, what is the difference between the two firms' ROEs? Applicable to Both Firms Firm HD's Data Firm LD's Data Assets $200 Debt ratio 50%
1. An analyst applies the Du Pont system of financial analysis to the following data for a company: ? Leverage ratio (assets/equity) 2.2 ? Total asset turnover 2.0 ? Net profit margin 5.5% ? Dividend payout ratio 31.8% What is the company's return on equity? ---------- I just want to confirm my answer and
How much are you willing to pay for one share of this stock if you want to earn 12% return on your equity investments?
Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $2.00 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn 12% return on your equity investments? A. $10.00 B. $13.33 C. $16.67 D. $18.88 E. $20
Utilizing the following information on the Smithwick Company,compute the firm's return on equity. Balance Sheet (000s) Current assets $1,500 Current liabilities $ 910 Fixed assets 7,000 Long-term liabilities 1,200
Evaluate Pepsi's financial performance over the past two years using financial ratios. Calculate the following ratios for each year (Return on equity) and (Days receivable) Be sure to discuss the trend for each ratio and what it tells you about the organization's financial health. Be sure to properly cite your sources of fin
See the attached file for full case. I am a bit weak understanding the Capstone case. I read through the solution that was posted online already but I am not 100% clear. For example, in question b) why is advertising disclosed separately even though carefully controlled? Or in part E how would you know the equity position did
See the attached file. 1. Millman Electronics will produce 60,000 stereos next year. Variable costs will equal 50% of sales, while fixed costs will total $120,000. At what price must each stereo be sold for the company to achieve an EBIT of $95,000? $6.57 $6.87 $7.17 $7.47 $7.77 2
To procure the basic financial documents for the company go to Intel's 2006 Financial Statements. Then, following the instructions laid out in this presentation on financial ratios and the examples given in this summary, perform a basic financial analysis of the company by calculating the following indicators (There are multipl
The Vogel Corporation reported net income for Year 6 of $355,000. Vogel began the year with 200,000 shares of $5 par value common shares outstanding and 5,000 shares of $100 par value 8% preferred shares outstanding. On July 1, Vogel sold (issued) 20,000 shares of common stock for $12 per share. Vogel paid dividends to both t
ROE = ROIC + (ROIC - i')D/E. Assume your company has a return on invested capital of 12%. Also assume your borrowing costs will rise as you employ more debt in your capital structure. a) Calculate ROE for the following combinations of capital structure and borrowing costs. i) D/E = 0.
Use the current stock prices from Sears, Google, and Ford motor company to make up a portfolio to invest in. Investments will be made of $100,000 into each company. Based on beta of each selected company and the proportion invested in each company, compute the portfolio beta. Based on the return (ROE) on each select company and
7. The Bluebird Company has a $10,000 liability it must pay three years from today. The company is opening a savings account so that the entire amount will be available when this debt needs to be paid. The plan is to make an initial deposit today and then deposit an additional $2,500 a year for the next three years, starting one
Answer: 3.37% due to financing; -0.07% due to change in spread; 3.44% due to change in leverage. Please show work as this is being used as a study guide. Analyzing a change in Return on Common Equity The following numbers were calculated from the financial statements for a firm for 2006 and 2005:
7. Companies generate income from their "regular" operations and from other sources like interest earned on the securities they hold, which is called non-operating income. Lindley Textiles recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,000 of depreciation. The company had no amort
1.What's the future value of $2,000 after 3 years if the appropriate interest rate is 8%, compounded semiannually? 2.You own an oil well that will pay you $25,000 per year for 8 years, with the first payment being made today. If you think a fair return on the well is 7%, how much should you ask for if you decide to sell it?
I Need an analysis on the attached consolidated statements (pages 46 - 49) on ROE (Return on Equity) and Days Receivable for Oct. 2006 and Sept. 2007. I have done the CURRENT and DEBT ratios but cannot find fields necessary to do the calculation for the ROE and Days Receivable.
Jarrett Enterprises is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales are $400,000; Fixed assets are $100,000; debt and equity are each 50% of total assets. EBIT is $36,000, the interest rate on the firms debt is 10% and the firms tax rate is 40%. With a restri
The shareholders equity section of Valade Corp's balance sheet is: 2006 2005 Preferred stock (8%, $50 par value) $300,000 $150,000 Common stock ($10 par value, 80,000 shares Authorized, 80,000 shares issued , 10,000 Shares treasury
Ridgefield Enterprises has total assets of $300 million and EBIT of $45 million. The company currently has no debt in its capital structure. The company is contemplating a recapitalization where it will issue debt at 10 percent and use the proceeds to buy back shares of the company's common stock. If the company proceeds with th
P12-2A Greeve Corporation had the following stockholders' equity accounts on January 1, 2006: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par Value $500,000, and Retained Earnings $100,000. In 2006, the company had the following treasury stock transactions. Mar. 1 Purchased 5,000 shares at $7 per share. Jun
ROE and capital structure. Ohio Quarry, Inc. which capital structure yields the highest variability (ie risk) in ROE?
Ohio Quarry, Inc. has $12,000,000 in assets. Its expected operating income (EBIT) is $2,000,000 and its income tax rate is 40%. If Ohio Quarry finances 20% of its total assets with debt capital, the pretax cost of funds is 10%. If the company finances 40% of its total assets with debt capital, the pretax cost of funds is 15%.