Assume the following relationships for the Caulder Corp.: 1.3x Sales/Total assets Return on assets (ROA) 4.0% Return on equity (ROE) 10.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total ass total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: %

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 8P
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Assume the following relationships for the Caulder Corp.:
1.3x
Sales/Total assets
Return on assets (ROA)
4.0%
Return on equity (ROE)
10.0%
Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal
total invested capital. Do not round intermediate calculations. Round your answers to two decimal places.
Profit margin:
Debt-to-capital ratio:
%
%
43
Transcribed Image Text:Assume the following relationships for the Caulder Corp.: 1.3x Sales/Total assets Return on assets (ROA) 4.0% Return on equity (ROE) 10.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: Debt-to-capital ratio: % % 43
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