The BEP, ROE and ROIC . Introduction: Ratio analysis is the procedure of analyzing and contrasting financial data by ascertaining important financial statement numerical calculations as opposed to looking at details from each financial statement.

Question

Broward Manufacturing recently reported the following information: Net income ROA BEP: Interest expense $184,800 Accounts payable and accruals $1,000,000 Broward's tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, and 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations. Round your answers to two decimal places. ROE: ROIC: *% % $528,000 % 8%

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Question

Chapter 4, Problem 9P

Summary Introduction

To determine: The BEP, ROE and ROIC.

Introduction: Ratio analysis is the procedure of analyzing and contrasting financial data by ascertaining important financial statement numerical calculations as opposed to looking at details from each financial statement.

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