A firm wishes to maintain an internal growth rate of 10 percent and a dividend payoutratio of 44 percent. The current profit margin is 6.6 percent and the firm uses no externalfinancing sources.What must total asset turnover be? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)Total asset turnovertimes

firm wishes to maintain an internal growth rate of 10 percent and a dividend pay atio of 44 percent. The current profit margin is 6.6 percent and the firm uses no exter nancing sources. What must total asset turnover be? (Do not round intermediate calculations and rou our answer to 2 decimal places, e.g., 32.16.) Total asset turnover times

firm wishes to maintain an internal growth rate of 10 percent and a dividend pay atio of 44 percent. The current profit margin is 6.6 percent and the firm uses no exter nancing sources. What must total asset turnover be? (Do not round intermediate calculations and rou our answer to 2 decimal places, e.g., 32.16.) Total asset turnover times

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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You are considering a new supplier that you estimate would reduce your costs 0.025, increasing overall EBIT margin the same amount, or 250 basis points. Tax burden 0.79 Interest burden 0.8 Operating margin Asset turnover 2.1 Leverage ratio 1.2 Equity 56 Before the changes are made the firm was intrinsically valued at 45.54 After the changes, what would the new value be assuming the new ROE, growth, and EPS1. The firm pays dividends as 0.61 of EPS. The discount rate is 0.15" O 64.88 O 70.24 62.35 O 67.36 0.08 O 73.13
How would each of the following factors affectratio analysis? (a) The firm’s sales are highly seasonal. (b) The firm uses some type of windowdressing. (c) The firm issues more debt and usesthe proceeds to repurchase stock. (d) The firmleases more of its fixed assets than most firmsin its industry. (e) In an effort to stimulate sales,the firm eases its credit policy by offering 60-daycredit terms rather than the current 30-day terms.How might one use sensitivity analysis to helpquantify the answers?
The Ashwood Company has a long-term debt ratio of 0.50 and a current ratio of 1.60. Current liabilities are $970, sales are $5,175, profit margin is 9.80 percent, and ROE is 17.60 percent. What is the amount of the firm's net fixed assets? Hint: This is another complex problem that requires a number of steps. Remember that CA + NFA=TA. So, if you find CA and TA, then you can solve for NFA Helpful Equations: Long-term debt ratio - LTD/(LTD + TE) CR-CA/CL PM-NI / Sales ROE-NI/TE O $3,851.53 O $3,601.92 O $5,181.07 O $6.733.07 O $2.881.53
RETURN ON EQUITY AND QUICK RATIO Lloyd Inc. has sales of $200,000, a net income of $15,000, and the following balance sheet: REFER IMAGE The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 25×, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 25×); if the funds generated are used to reduce common equity (stock can be repurchased at bookvalue); and if no other changes occur, by how much will the ROE change? What will be the firm’s new quick ratio?
M9
The return on capital employed for S is 24% and the net asset turnover ratio is 3 times. What is the profit margin? A 8% B 28% C 72% D It cannot be calculated
Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $360,000. Answer each of the following questions independently, always referring to the original information. Required: If the firm pays an account payable of $53,000, what will its new current ratio and working capital be? Note: Do not round intermediate calculations. Round "Current ratio" to 1 decimal place. If the firm sells inventory that was purchased for $50,000 at a cash price of $64,000, what will its new acid-test ratio be? Note: Do not round intermediate calculations. Round your answer to 1 decimal place.
Total asset turnover shows. Select one: a.dollar amount investment in assets needed to generate one dollar in sales b.how well the firm's operating earnings can cover current interest obligations c.how much in sales is generated by each dollar of firm assets d.the dollar worth of firm assets each equity dollar has a claim to
Calculate the value of the firm using the following perpetual data. Assume no growth. Revenue: $643 Salaries and Materials: $400 Depreciation: $100 Tax Rate 30% Cost of Equity 9% Cost of Debt 4.286% D/E 2:1
Which of the following is most likely true concerning the stability and trend of earnings? 1. require at leaset 5 years of historical data to be meaningful 2. are not factored in the analysis of revenues 3. depend on the trend of a dingle industry 4. are key factors when calculating cost of sales
Blue Co. has a total liabilities of P400,000 on which 40% is a long-term liability. The non-current asset of the firm is half of the total asset and it is determined that its current ratio is 3:1. If the firm has a net profit of P144,000, what will be the return on asset? (type the answer in percentage with “%”)
Tinsley, Incorporated, wishes to maintain a growth rate of 16.25 percent per year and a debt-equity ratio of .95. The profit margin is 4.7 percent, and total asset turnover is constant at 1.07. a. What is the dividend payout ratio? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the maximum sustainable growth rate for this company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Dividend payout ratio b. Sustainable growth rate % %

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