Question

JCJ Inc. has (NI/EBT ) =  .25 JCJ Inc. has (EBT/EBIT ) =  1 JCJ Inc. has (EBIT/SALES...

JCJ Inc. has (NI/EBT ) =  .25

JCJ Inc. has (EBT/EBIT ) =  1

JCJ Inc. has (EBIT/SALES ) =  .80

JCJ Inc. has  an equity multiplier of  3

JCJ Inc. has  a total asset turnover ratio of 1.5

Sales are $500,000

A.) If JCJ Inc. has sales of $100,000, what is JCJ’s Net Income?

  1. $100,000
  2. $25,000
  3. $80,000
  4. $20,000
  5. None of the above

  

B.) What was JCJ’s interest expense for the year? If there is not enough information, please let me know.

  1. $0
  2. $20,000
  3. $16,000
  4. $4,000
  5. None of the above

C.) What was JCJ’s operating expenses?  If there is not enough information, please let me know.

  1. $100,000
  1. $25,000
  2. $80,000
  3. $20,000
  4. None of the above
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Homework Answers

Answer #1
A) EBIT / Sales = 0.8
EBIT / $ 100000 = 0.8
EBIT = $ 80,000.00
EBT / EBIT = 1
EBT / $ 80000 = 1
EBT = $ 80,000.00
NI / EBT = 0.25
NI / $ 80000 = 0.25
NI = $ 20,000.00
Answer: D
B) Since EBT / EBIT = 1
We can say that interest expense is 0
Answer: A
C) EBIT / Sales = 0.8
EBIT / $ 500000 = 0.8
EBIT = $ 4,00,000.00
Operating Expense = Sales - EBIT
= $ 500000 - $ 400000
= $ 1,00,000.00
Answer: A
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