If Gandhi & Co. has a 15% return on assets (ROA) and 25% is the pay-out ratio, what is its internal growth rate. а. 11.22% b. 12.68% c. 3.90% d. 10.12%
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- Assume the following ratios are constant: Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 6.5% 1.6 20% What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %If Gandhi & Co. has a 15% return on assets (ROA) and 25% is the pay-out ratio, what is its internal growth rate. a. 11.22% b. 12.68% c. 3.90% d. 10.12%Determining PB Ratio for Companies with Different Returns and Growth Assume that the present value of expected ROPI follows a perpetuity with growth g (Value = Amount/ [r - g]). Determine the theoretically correct PB ratio for each of the following companies A and B. Note: NOPAT = NOA » RNOA. Company Net Operating Assets Equity RNOA ROE Weighted Avg. Cost of Capital Growth Rate in ROPI $100 $100 19% 19% 10% 2% $100 $100 12% 12% 10% 4% A B Round answers to two decimal places. PB Ratio Company A Company B
- Assume the following ratios are constant. Total asset turnover 1.49 Profit margin 8.7% Equity multiplier 1.6 Payout ratio 55% What is the sustainable growth rate?Assume the following ratios are constant: Profit margin Total asset turnover 2.5 5.2% Equity multiplier 1.3 Payout ratio 22% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Answer is complete but not entirely correct. Sustainable growth rate 1.09 %What is the sustainable growth rate if the ROE is 17% and the payout ratio is 25%. а. 12.79% b. 8.00% с. 14.61% d. 8.62%
- Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ration 2.29 Sustainable growth rate 5.7% 1.76 36% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) A. Sustainable growth rate _______% B. Internal growth rate ______%Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ratio = Sustainable growth rate |||||||| 2.22 5.0% 1.69 What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 47% %
- Return on Capital Employed (ROCE) = For Riccarton PLC: ROCE = 50000/380000 X 100 = 13.2% For Edinburgh PLC: ROCE = 45000/230000 X 100 = 19.6% Current Ratio = Current assets/current liabilities For Riccarton PLC: Current ratio = 150/120 = 1.25 For Edinburgh PLC: Current ratio = 80/70 = 1.14 Gearing Ratio = (long term borrowing + short term borrowings) / equity For Riccarton PLC: Gearing ratio = (180 + 100)/200 = 1.4 For Edinburgh PLC: Gearing ratio = (100 + 50)/130 = 1.15 Price/Earnings (P/E) Ratio = Share price / earnings per share For Riccarton PLC: P/E Ratio = 195/35 =5.57 For Edinburgh PLC: P/E Ratio = 451/28 = 16.107 Based on the above ratios explain, which company George H. and James W. should invest in. You should also briefly discuss the limitations of your analysis.If the asset turnover is 1.6, the financial leverage multiplier is 2.1, the return on asset is 25% and return on equity is 52.5%, what is the net profit margin? a. 15.63% c. 21.00% b. 44.10% d. 32.81%Loreto Incorporated has the following financial ratios: asset turnover = 2.00; net profit margin (i.e., net income/sales) = 7%; payout ratio = 30%; equity/assets = 0.60. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Sustainable growth rate b. Internal growth rate 14 % %
