Using the data in the following table for a number of firms in the same industry, do the following: •a. Compute the total asset turnover, the net profit margin, the equity multiplier, and the return on equity for each firm. b. Evaluate each firm’s performance by comparing the firms with one another. Which firm or firms appear to be having problems? What corrective action would you suggest the poorer performing firms take? Finally, what additional data would you want to have on hand when conducting your analyses? Firm (in million Dollars A B C D Sales $20 $10 $15 $25 Net Income after sales 3 0.5 2.25 3 Total Assets 15 7.5 15 24 Stockholders’ Equity 10 5 14 10
Using the data in the following table for a number of firms in the same industry, do the following: •a. Compute the total asset turnover, the net profit margin, the equity multiplier, and the return on equity for each firm. b. Evaluate each firm’s performance by comparing the firms with one another. Which firm or firms appear to be having problems? What corrective action would you suggest the poorer performing firms take? Finally, what additional data would you want to have on hand when conducting your analyses? Firm (in million Dollars A B C D Sales $20 $10 $15 $25 Net Income after sales 3 0.5 2.25 3 Total Assets 15 7.5 15 24 Stockholders’ Equity 10 5 14 10
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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Using the data in the following table for a number of firms in the same industry, do
the following:
•a. Compute the total asset turnover, the net profit margin, the equity multiplier, and
the
b. Evaluate each firm’s performance by comparing the firms with one another.
Which firm or firms appear to be having problems? What corrective action
would you suggest the poorer performing firms take? Finally, what additional data would you want to have on hand when conducting your
analyses?
Firm
| (in million Dollars | A | B | C | D |
| Sales | $20 | $10 | $15 | $25 |
| Net Income after sales | 3 | 0.5 | 2.25 | 3 |
| Total Assets | 15 | 7.5 | 15 | 24 |
| 10 | 5 | 14 | 10 |
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