Answer the questions below based on the following information. The tax rate is 35%, and alldollars are in millions. Assume that the companies have no liabilities other than the debt shownbelow.SuuntoIncorporationRunrunCorporationEarnings before interest and taxes$ 280$ 294Debt (at 10% interest)Equity$ 140$ 840$ 560$ 210a. Calculate each company's ROE, ROA, and ROIC.b. Why is Runrun's ROE higher than Suunto's? Does this mean Runrun is a better company?Why or why not?c. Why is Suunto's ROA higher than Runrun's? What does this tell you about the twocompanies?d. How do the two companies' ROICS compare? What does this suggest about the twocompanies?

a. Calculating ROE, ROA, and ROIC:1. ROE (Return on Equity): - ROE measures how efficiently a…

Answered: Answer the questions below based on the…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3P

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Answer the following questions based on the information in the table. Assume a tax rate of 30 percent. For simplicity, assume that the companies have no other liabilities other than the debt shown. (All dollars are in millions.) Earnings before interest and taxes Debt (at 7% interest) Equity a. Calculate each company's ROE, ROA, and ROIC. Note: Round your answers to 1 decimal place. ROE ROA ROIC Atlantic Corporation Pacific Corporation % % % % % % Atlantic Corporation $ 540 $ 310 $ 1,060 Pacific Corporation $ 540 $ 1,640 $ 370
Answer the following questions based on the information in the table. Assume a tax rate of 30 percent. For simplicity, assume that the companies have no other liabilities other than the debt shown. (All dollars are in millions.) \table[[,\table[[Atlantic],[Corporation]],Pacific],[Earnings before interest and taxes,$470,$470
Samuel Corp. provides the following information: EBIT = $386.50 Tax (TC ) = 21% Debt = $700 RU = 10% Question: What is the value of Samuel’s equity?
Use the following information about Red Rocks Inc. to answer the following question: Assume the following: Pays no taxes Return on net operating assets (RNOA) = 18% %3D Has $2,000 in net operating assets financed by equity At the beg. of the year borrows $1000 at 8%. Uses debt to buy additional operating assets. What is the return on equity (ROE) for Red Rocks? Edit View Insert Format Tools Table 12pt v Paragraph v B IU A e T?v I.
Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.9 Return on assets (ROA) 3% Return on equity (ROE) 5% Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Liabilities-to-assets ratio: % Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.
Q9: You have the following data :Operating income 30,000 ID, interest revenue 5,000 ID, interest on notes and bonds 20,000 ID, rental revenue 15,000 ID, bank exp. 10,00O ID, dividends received 5,000 ID, So what * ?is the net profit before tax
a)Assume that the following data is extracted from the financial statements of Richy-Rich bank: equity is $350 million, interest expense is $115 million, provision for loan loss (P) is $35 million, noninterest income is $30 million, noninterest expense is $50 million and a tax rate is 33%. What is the minimum total interest income required to give a return on equity (ROE) of 20%? Show workings when necessary. b) Be-smart Bank reported an equity multipler ratio of 6.5 at the end of year 2021. If the bank’s total debt at the end of year 2021 was $5 million, how much of its assets were financed with equity? Show calculations when necessary. c) What are the main sources of funding for commercial banks? Using bullet points, classify these sources and briefly describe each category.
Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.2 Retum on assets (ROA) 4% Return on equity (ROE) 5% Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Liabilities-to-assets ratio: % Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. %
Byron Books Inc. recently reported $13 million of net income. Its EBIT was $22.1 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $13 million of net income by (1 - T) = 0.65 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.) Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations.
A company has the following information: Earnings before interest and taxes Interest expense $140.00 12.00 40% 10.00 12.00 Tax rate Net change in debt Investment in total capital What is its free cash flow to equity? Do not round intermediate calculations. Round your answer to the nearest cent.
Give only typing answer with explanation and conclusion Byron Books Inc. recently reported $18 million of net income. Its EBIT was $34.3 million, and its tax rate was 25%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $18 million of net income by (1 - T) = 0.75 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.) Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations.
Now ant evaluating the balance sheet for Mari Corporation. from the balance sheet you find the following balances Cast and marketable securities = $420,000, Ramunds Race hase = $ 80000 inventony = $t. 120.000. Prepaid Rent Expense= $360. 000 Accrued Taves = $24.00 Accounts Payeble = $1.030.000 Notes Payable = $ 370.000 Net Profit After Tax $ 250.000 What is the amount of Marin's Net Working Capital?

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