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eturn on equity b) return on assests c) return on capital

eturn on equity b) return on assests c) return on capital

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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a) return on equity

b) return on assests

c) return on capital

Financial Ratios. Here are simplified financial statements for Phone Corporation in a recent 7. year: INCOME STATEMENT (Figures in $ millions) 13,193 4,060 Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense 4,049 2,518 2,566 685 Income before tax 1,881 Taxes (at 35%) 658 Net income 1,223 Dividends 856 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 89 %24 158 Receivables 2,382 187 2,490 Inventories ne 238 Other current assets 867 932 $ 3,525 $ 3,818 19,915 Total current assets Net property, plant, and equipment Other long-term assets 19,973 4,216 $27,714 3,770 $27,503 Total assets Liabilities and shareholders' equity Payables Short-term debt $ 2,564 $ 3,040 1,573 1,419 Other current liabilities 811 787 Total current liabilities $ 4,794 $ 5,400 Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity 7,018 6,833 6,149 9,121 $27,503 6,178 9,724 $27,714 Calculate the following financial ratios for Phone Corporation: (LO4-3)
Transcribed Image Text:Financial Ratios. Here are simplified financial statements for Phone Corporation in a recent 7. year: INCOME STATEMENT (Figures in $ millions) 13,193 4,060 Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense 4,049 2,518 2,566 685 Income before tax 1,881 Taxes (at 35%) 658 Net income 1,223 Dividends 856 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 89 %24 158 Receivables 2,382 187 2,490 Inventories ne 238 Other current assets 867 932 $ 3,525 $ 3,818 19,915 Total current assets Net property, plant, and equipment Other long-term assets 19,973 4,216 $27,714 3,770 $27,503 Total assets Liabilities and shareholders' equity Payables Short-term debt $ 2,564 $ 3,040 1,573 1,419 Other current liabilities 811 787 Total current liabilities $ 4,794 $ 5,400 Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity 7,018 6,833 6,149 9,121 $27,503 6,178 9,724 $27,714 Calculate the following financial ratios for Phone Corporation: (LO4-3)
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