What is the firm's 2019 current ratio? Round your answer to two decimal places. The 2019 current ratio indicates that Rosnan has-Select- What is the firm's 2019 total assets turnover ratio? Round your answer to four decimal places. ✓current assets to meet its current obligations as they come due. Given the 2019 current and total assets turnover ratios calculated above, if Rosnan's 2019 quick ratio is 1.0 then an analyst might conclude that Rosnan's fixed assets are managed What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places. If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a -Select-cushion than indicated by the industry average. What is the firm's 2019 profit margin? Round your answer to two decimal places. If the industry average profit margin is 12 %, then Rosnan's lower than average debt-to-capital ratio might be one reason for its high profit margin. -Select- What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places. -Select-

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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What is the firm's 2019 current ratio? Round your answer to two decimal places.
The 2019 current ratio indicates that Rosnan has -Select- ✓ current assets to meet its current obligations as they come due.
What is the firm's 2019 total assets turnover ratio? Round your answer to four decimal places.
Given the 2019 current and total assets turnover ratios calculated above, if Rosnan's 2019 quick ratio is 1.0 then an analyst might conclude that Rosnan's fixed assets are managed -Select-
What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places.
If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a -Select-
What is the firm's 2019 profit margin? Round your answer to two decimal places.
%
cushion than indicated by the industry average.
If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-capital ratio might be one reason for its high profit margin. -Select- ✔
What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places.
Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places.
%
Transcribed Image Text:What is the firm's 2019 current ratio? Round your answer to two decimal places. The 2019 current ratio indicates that Rosnan has -Select- ✓ current assets to meet its current obligations as they come due. What is the firm's 2019 total assets turnover ratio? Round your answer to four decimal places. Given the 2019 current and total assets turnover ratios calculated above, if Rosnan's 2019 quick ratio is 1.0 then an analyst might conclude that Rosnan's fixed assets are managed -Select- What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places. If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a -Select- What is the firm's 2019 profit margin? Round your answer to two decimal places. % cushion than indicated by the industry average. If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-capital ratio might be one reason for its high profit margin. -Select- ✔ What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places. %
The DuPont equation shows the relationships among asset management, debt management, and -Select-
ROE = Profit margin x Total assets turnover x Equity multiplier
Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. -Select-
Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below.
Balance Sheets:
Cash and equivalents
Accounts receivable
Inventories
Total current assets
Net plant and equipment
Total assets
Accounts payable
Accruals
Notes payable
Total current liabilities
Long-term debt
Common stock
Retained earnings
Total liabilities and equity
Sales
Operating costs excluding depreciation
EBITDA
Depreciation and amortization
EBIT
Interest
EBT
Taxes (25%)
Net income
Income Statements:
Dividends paid
Addition to retained earnings
Shares outstanding
Price
WACC
2019
$100 Ś 85
275
300
375
350
750
$ 735
2,000
1,490
$2,750
$2,225
2018
$ 150 $ 85
75
50
150
175
375
$ 310
450
290
1,225
1,225
400
700
$2,750 $2,225
2019
$1,885
1,250
$ 635
100
$ 535
63
2018
$1,425
1,000
$ 425
75
$ 350
46
$ 472 $ 304
118
76
$ 354
228
$ 54 S 48
$300
$ 180
100
100
$25.00 $22.50
10.00%
✓ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is:
What is the firm's 2019 current ratio? Round your answer to two decimal places.
✓ factors also need to be considered.
Transcribed Image Text:The DuPont equation shows the relationships among asset management, debt management, and -Select- ROE = Profit margin x Total assets turnover x Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. -Select- Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income Income Statements: Dividends paid Addition to retained earnings Shares outstanding Price WACC 2019 $100 Ś 85 275 300 375 350 750 $ 735 2,000 1,490 $2,750 $2,225 2018 $ 150 $ 85 75 50 150 175 375 $ 310 450 290 1,225 1,225 400 700 $2,750 $2,225 2019 $1,885 1,250 $ 635 100 $ 535 63 2018 $1,425 1,000 $ 425 75 $ 350 46 $ 472 $ 304 118 76 $ 354 228 $ 54 S 48 $300 $ 180 100 100 $25.00 $22.50 10.00% ✓ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is: What is the firm's 2019 current ratio? Round your answer to two decimal places. ✓ factors also need to be considered.
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