Assume that your firm has a return on assets of 14.7%, sales of $16,625,000, total assets of $4,750,000, a return on equity of 36.75%, an interest rate on total debt of 10 percent, and a tax rate of 40 percent. Given this information, determine the firm's basic earnings power. (Hint: you may need to work an income statement backwards to get EBIT, in which case you will need to determine the firm's net income or profit, as well as its interest expense on total debt.)
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- You have the following ratios for a firm you're analyzing: Working capital / total assets = 0.7 Retained earnings / total assets = 0.3 EBIT / total assets = 0.2 market value of equity / book value of LT debt = 1.3 sales / total assets = 0.4 Calculate the firm's Z-score. EnterAssume that you are a consultant to Morton Inc., and you have been provided with the following data: DO = $1.4; PO = $36; and g = 4.8% (constant). What is the cost of equity from retained earnings based on the DCF approach? O 9.68% O 9.08% O 9.48% O 9.28% O 8.88% 19As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings? Please show formula and answer
- Analyze the financial statements of the company to you in terms of:1. Solvency Ratio: *Equity Ratio 2. Asset Management Ratio: *Invetory Turnover Ratio *Fixed Asset Turnover Ratio *Total Asset Turnover Ratio 3. Debt Management Ratio: *Time Interest Earned Ratio 4. Profitability Ratio: *Operating Margin *Return on Total Assets *Return on Common Equity.…Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.)A company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $2.45; P0 = $28.96; and g = 4.06% (constant). What is the cost of equity from retained earnings? Do not round your intermediate calculations. Express your answer as a percent rounded to two decimal places.
- Analyze the financial statements of the company to you in terms of: 1. Profitability Ratio: *Operating Margin *Return on Total Assets *Return on Common Equity. *Return on Invested Capital *Basic Earnings Power Ratio2020 Analysis BUT also compare with 2018 - 2019. Show solution on computaion.Define profitability raitos return on assets and return on equity. According to the following metrics: ROA Return on Assets: 14%; ROE Return on Equity: 305%. What is the profitability the of example company? Why or why not is this company profitable?You've collected the following information about Groot, Inc.: Profit margin Total asset turnover Total debt ratio Payout ratio = 4.44% = 3.50 = .25 = 29% a. What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the ROA? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Sustainable growth rate b. ROA % 15.54 %
- A company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $2.45; P0 = $28.96; and g = 4.06% (constant). What is the cost of equity from retained earnings? Do not round your intermediate calculations. Express your answer as a percent rounded to two decimal places. (For example, 4.567% should be entered as 4.57)As a consultant to Bass Inc, you have been provided with the following data D1= $0.67, P0= $27.50 and gl=8%. What is the cost of common from invested earning based on the dividend growth approach? (11.51%, 10.44%, 9.91%, 9.42%, or 10.96%)Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's payout ratio be?