Answered: A firm has a profit margin of 5% and an…

A firm has a profit margin of 5% and an equity multiplier of 2.2. Its sales are $310 million, and it has total assets of $124 million. What is its ROE?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 5P: Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are...

See similar textbooks

Related questions

Q: Need help with this accounting questions

A: Step 1: Definition of Structural Deficit and Cyclical DeficitStructural Deficit: This represents the…

Q: What is the solution

Q: Please solve this question general accounting

A: Step 1: Define Contribution Margin RatioThe contribution margin ratio shows the contribution margin…

Q: Andrews Corporation uses a process costing system for manufacturing. The following information is…

A: The cost per equivalent unit of production represents the number of units that could be produced…

Q: How much income should be recognized?

A: Explanation of Retail Price:The retail price is the price at which a product is sold to customers,…

Q: Financial accounting question

A: Step 1: Define PurchasesPurchases are defined as the process of obtaining products or services in…

Q: Provide correct answer general Accounting question

A: Step 1: Net income Net income = Sales x MarginNet income = $800,000 x 9%Net income = $72,000 Step…

Q: What is its net income?

A: The question requires the determination of the net income. Net income represents the accounting…

Q: Don't want wrong answer

A: To calculate ROE, use the following formula:ROE = (Net Income / Total Equity) x 100Plug in the given…

Q: Hii expert please provide correct answer general Accounting

A: Step 1: Define Labor Quantity Variance (LQV)The Labor Quantity Variance (LQV) measures the…

Q: What must the expected return on this stock be? Please answer the financial accounting question

A: Step 1: Given Value for Calculation Beta = b = 1.25Market Return = rm = 14%Risk Free rate = rf =…

Q: Kindly help me with general accounting question

A: Step 1: Define Accounts ReceivableAccounts receivable refers to the amount due from the customers…

Q: Answer this financial accounting question

A: Explanation of Profit Margin:Profit margin measures the percentage of revenue that a company retains…

Q: Please give me true answer this general accounting question

A: Explanation: Gain (or loss) on sale of equipment can be calculated by deducting the carrying amount…

Q: Variable cost

A: Explanation of Break-Even Sales (Units):Break-even sales (units) represent the number of units a…

Q: Kindly help me with accounting questions

A: Step 1: Definition of Return on Assets (ROA)Return on Assets (ROA) measures a company's…

Q: What is variance?

A: Explanation of Direct Labor Price Variance:Direct Labor Price Variance refers to the difference…

Q: Don't give me incorrect solution

A: Let's calculate manually step by step. a. ROE (Return on Equity):The formula is:ROE=Profit…

Q: help accounting tutor.

A: The correct answer is:D. Wages of assembly-line workers. Explanation:Period costs are costs that…

Q: General accounting

A: Step 1: Define Asset Turnover RatioThe asset turnover ratio is one of the efficiency ratios that…

Q: Outstanding debt of Home depot trades with a yield... Please answer the financial accounting…

A: Step 1: Define Cost of DebtThe cost of debt can be explained as the rate of return that is demanded…

Q: In determining the market value of ending inventory, which of the following is NOT considered as a…

A: The correct answer is:d) Selling price without any adjustments. Explanation:In determining the…

Q: How much equity does trinas trikes have ??

A: To calculate: Trina Trike's equityGiven:Debt-equity ratio = 1.81Total debt = $9 million Debt-equity…

Q: What was the gross margin on these general accounting question?

A: Step 1: Define Gross MarginGross margin is the difference between sales revenue and the cost of…

Q: Kindly help me with accounting questions

A: Step 1: Definition of Primary Residence ExclusionUnder U.S. tax law, a single taxpayer may exclude…

Q: The stockholders' equity at the beginning of the period was $212,000; at the end of the period,…

A: Explanation of Stockholders' Equity and Net Income/Net Loss:Stockholders' equity represents the…

Q: Finished goods inventory costs $_

A: Step 1: Understand Variable CostingUnder variable costing, only variable manufacturing costs are…

Q: Calculate net income after taxes using a 34% tax rate ??

A: Step 1: Definition of Net IncomeNet income after taxes is calculated by subtracting all expenses…

Q: Kindly help me with accounting questions

A: Step 1: Definition of Days' Sales in Accounts ReceivableDays' Sales in Accounts Receivable measures…

Q: General Accounting Question please solve this one

A: Step 1: Define Variable OverheadVariable overhead refers to the indirect costs that vary directly…

Q: Calculate the adjusted net income??

A: Step 1: Analysis of information givenRevenues Understated by $1,500: Revenues are a source of…

Q: Hii expert please provide correct answer general Accounting question

A: Step 1: Define Book ValueThe book value of an intangible asset, such as a patent, represents its…

Q: Charged under the new credit policy?

A: Step 1: Given Value for calculation Required Return = r = 2.5%Current Policy Price per Unit = cp =…

Q: Kindly help me with accounting questions

A: Step 1: Definition of the High-Low MethodThe high-low method is a technique used to separate fixed…

Q: Get correct answer accounting questions

A: Step 1: Definition of Net IncomeNet income is the profit remaining after deducting all expenses,…

Q: What is the dividend payout ratio on these financial accounting question?

A: Step 1: Define Dividend Payout RatioThe dividend payout ratio measures the proportion of net income…

Q: Need answer

A: Book value on December 31, Year 2 = Book value at beginning of January 1, year 2 - Depreciation…

Q: The June 1 work-in-process inventory consisted of 4,400 pounds with $14,100 in materials cost and…

A: Step 1: Key InformationBeginning Work-in-Process (WIP) Inventory (June 1):Pounds: 4,400Materials:…

Q: What is heart & soul's contribution margin per unit in dollars??

A: Contribution margin per unit is the amount by which the selling price of a single unit exceeds its…

Q: Recalculate net income for all three years using variable costing.

A: Step 1:There are two methods to calculate the income of the business i.e., variable costing and…

Q: VR Corporation makes a product whose direct labor standard are 1.3 hours per unit and $14 per hour.…

A: Explanation of Labor Rate Variance:Labor rate variance is the difference between the actual labor…

Q: Determine its product cost per unit.

A: To calculate the product cost per unit under variable costing, we include only variable…

Q: ??

A: The question requires the determination of the ROA.Return on assets (ROA) is a financial ratio that…

Q: Provide correct answer general Accounting

A: Step 1: Define InterestWhen a company borrows through loans or negotiable instruments, it should pay…

Q: Accounting Problem 4.8.14: Berlin's TVs has current liabilities of $26.7 million. Cash makes up 41…

A: Explanation of Current Ratio:The current ratio is a liquidity measure that evaluates a company's…

Q: Hi expert please give me answer general accounting question

A: Step 1: Definition of the Accounting EquationThe accounting equation is:Assets=Liabilities+Owner's…

Q: (Financial account)

A: Step 1: Information givenEnding Inventory (January 31) = $36,800Cost of Goods Sold (COGS) =…

Q: The overhead at the end of the month would therefore be ?

A: Explanation of Predetermined Overhead Rate:The predetermined overhead rate is a calculated rate used…

Q: 5 Points

A: Concept of Bonds Issued at ParWhen bonds are issued at par, their issuance price is equal to their…

Q: Which of the following would not be classified as a product cost? A. Direct materials. B. Direct…

A: The correct answer is:D. Sales commissions. Explanation:Product costs are costs incurred to…

Question

100%

What is its ROE?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is 200,000. Moore is 100% equity financed, and it faces a 40% tax rate. What is the companys net income? What is its net cash flow?
Assume Skyler Industries has debt of $4,500,000 with a cost of capital of 7.5% and equity of $5,500,000 with a cost of capital of 10.5%. What is Skylers weighted average cost of capital?
Assume Plainfield Manufacturing has debt of $6,500,000 with a cost of capital of 9.5% and equity of $4,500,000 with a cost of capital of 11.5%. What is Tylers weighted average cost of capital?
The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month, what is their degree of operating leverage? 0.21 1.21 2.4 5.7
Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin (net margin %) over the past 10 years? What has happened to its return on assets (ROA) and return on equity (ROE) over the past 10 years?
If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month, what is their degree of operating leverage? A. 0.18 B. 1.18 C. 2.4 D. 4.7
The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year. A. Determine the operating income (loss) (dollars) for each year. B. Determine the operating income (percentage) for each year. C. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in part C.
The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days’ sales outstanding of 36.5 days (based on a 365-day year), total current assets of $810,000, and cash and marketable securities of $120,000. What were Kretovich’s annual sales?
Assume a company is going to make an investment in a machine of $825,000 and the following are the cash flows that two different products would bring. Which of the two options would you choose based on the payback method?
A company had WACC (weighted average cost of capital) equal to 8. % If the company pays off mortgage bonds with an interest rate of 4% and issues an equal amount of new stock considered to be relatively risky by the market, which of the following is true? a. residual income will increase. b. ROI will decrease. c. WACC will increase. d. WACC will decrease.