Subject: Business    / Finance
Question

Problem 4-1
Days Sales Outstanding

Baker Brothers has a DSO of 33 days, and its annual sales are $10,220,000. What is its accounts receivable balance? Assume that it uses a 365-day year. Round your answer to the nearest cent.

$???

Problem 4-2
Debt to Capital Ratio

Bartley Barstools has a market/book ratio equal to 1. Its stock price is $13 per share and it has 4.9 million shares outstanding. The firm’s total capital is $135 million and it finances with only debt and common equity. What is its debt-to-capital ratio? Round your answer to two decimal places.

???%

Problem 4-3
DuPont Analysis

Doublewide Dealers has an ROA of 9%, a 6.5% profit margin, and an ROE of 17%.

What is its total assets turnover? Round your answer to two decimal places.

What is its equity multiplier? Round your answer to two decimal places.

???

Problem 4-4
Market/Book Ratio

Jaster Jets has $14 billion in total assets. Its balance sheet shows $2.1 billion in current liabilities, $9.1 billion in long-term debt, and $2.8 billion in common equity. It has 600 million shares of common stock outstanding, and its stock price is $33 per share. What is Jaster’s market/book ratio? Round your answer to two decimal places.

x???

Problem 4-5
Price/Earnings Ratio

A company has an EPS of $4.20, a book value per share of $45.36, and a market/book ratio of 3.2x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places.

x????

Problem 4-6
DuPont and Roe

A firm has a profit margin of 7% and an equity multiplier of 2.7. Its sales are $70 million, and it has total assets of $21 million. What is its ROE? Round your answer to two decimal places.

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Problem 4-7

ROE and ROIC

Hilyard Industries’ net income is $27,000, its interest expense is $4,000, and its tax rate is 35%. Its notes payable equals $25,000, long-term debt equals $70,000, and common equity equals $245,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places.

ROE

?????%

ROIC

?????%

Problem 4-8
DuPont and Net Income

Ebersoll Mining has $13 million in sales, its ROE is 16%, and its total assets turnover is 2.5x. Common equity on the firm’s balance sheet is 60% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.

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Problem 4-9
BEP, ROE, and ROIC

Duval Manufacturing recently reported the following information

Net income

$420,000

ROA

11%

Interest expense

$159,600

Accounts payable and accruals

$1,000,000

Duval’s tax rate is 40%. Duval finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC) Round your answers to two decimal places.

BEP

%???

ROE

%????

ROIC

%???

Problem 4-10
M/B and Share Price

You are given the following information: Stockholders’ equity = $3.25 billion, price/earnings ratio = 20, common shares outstanding = 50 million, and market/book ratio = 1.3. Calculate the price of a share of the company’s common stock. Round your answer to the nearest cent.

$???

Problem 4-11
Ratio Calculations

Assume the following relationships for the Brauer Corp.:

Sales/total assets

1.4x

Return on assets (ROA)

5%

Return on equity (ROE)

15%

Calculate Brauer’s profit margin assuming the firm uses only debt and common equity. Round your answer to two decimal places.

%???

Calculate Brauer’s debt-to-assets ratio assuming the firm uses only debt and common equity. Round your answer to two decimal places.

%???

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