Need answer please The gross profit margin (gross profit/sales) ofABC, Inc. is 0.25, its operating profit margin(EBIT/sales) is 14%, its TATO ratio is 1.50x, andits COGS is $600,000. ABC's tax rate is 40%. If thefirm is an all-equity firm, calculate thecompany's ROA and ROE.

Approach to solving the question:Step 1: Figure out sales (revenue).Cost of Goods Sold (COGS) and…

Answered: The gross profit margin (gross…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 13P

See similar textbooks

Similar questions

The gross profit margin (gross profit/sales) of ABC, Inc. is 0.25, its operating profit margin (EBIT/sales) is 14%, its TATO ratio is 1.50x, and its COGS is $600,000. ABC's tax rate is 40%. If the firm is an all-equity firm, calculate the company's ROA and ROE.
Help me
Give typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of capital of 11.5 per cent. The company's cost of equity is 16 per cent, and its cost of debt is 8.5 per cent. The tax rate is 35 per cent. What is Fama's debt–equity ratio?
Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.2x Return on assets (ROA) 6% Return on equity (ROE) 15% a. Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. % b. Calculate Caulder's 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 answer to two decimal places. %
Find the WACC given the following information: A firm has a cost of equity of 8% and cost of debt of 6.5%. The debt - toequity ratio is 0.75. The tax rate is 15%.
A firm has a tax burden ratio of 0.85, a leverage ratio of 1.5, an interest burden of 0.9, and a return on sales of 12%. The firm generates $2 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) ROE %
Using the DuPont method, evaluate the effects of the following relationships for the Butters Corporation. A.Butters Corporation has a profit margin of 5.5 percent and its return on assets (investment) is 8.75 percent. What is its assets turnover? Round your answer to 2 decimal places. ______ times B.If the Butters Corporation has a debt-to-total-assets ratio of 65.00 percent, what would the firm’s return on equity be? Note: Input your answer as a percent rounded to 2 decimal places. C.What would happen to return on equity if the debt-to-total-assets ratio decreased to 60.00 percent? Input your answer as a percent rounded to 2 decimal places.
Lawn Care, Incorporated, has sales of $367,400, costs of $183,600, depreciation of $48,600, interest of $39,200, and a tax rate of 21 percent. The firm has total assets of $328,700, long-term debt of $62,400, and current liabilities of $76,300. What is the return on equity? Multiple Choice 39.92% .76% 25.21% 78.78% 29.02%
What is international,inc. dol?
CoffeeCarts has a cost of equity of 15.9%, has an effective cost of debt of 4.2%, and is financed 66% with equity and 34% with debt. What is this firm's WACC? CoffeeCarts's WACC is __% ? (Round to one decimal place.)
What is John wick companies ROE?
Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.)

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

The gross profit margin (gross profit/sales) of ABC, Inc. is 0.25, its operating profit margin (EBIT/sales) is 14%, its TATO ratio is 1.50x, and its COGS is $600,000. ABC's tax rate is 40%. If the firm is an all-equity firm, calculate the company's ROA and ROE.