BEP, ROE, AND ROIC Broward Manufacturing recently reported the following information: Net income $615,000 ROA 10% Interest expense $202,950 Accounts payable and accruals $950,000 Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, and 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).
BEP, ROE, AND ROIC Broward Manufacturing recently reported the following information: Net income $615,000 ROA 10% Interest expense $202,950 Accounts payable and accruals $950,000 Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, and 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).
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 6P
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BEP, ROE, AND ROIC Broward Manufacturing recently reported the following information: Net income $615,000
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