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Question 1 1a) A company has $1 billion of sales and $50 million of net income.  Its...

Question 1
1a) A company has $1 billion of sales and $50 million of net income.  Its total assets are $500 million, financed half by debt and half by common equity.  What is its profit margin?  What is its ROA?
4
Sales ($M)
Net income ($M)
Total assets ($M)
Debt ratio
Profit margin
Sales ($M)
Net income ($M)
Total assets ($M)
Debt ratio
ROA
1b) A company has a profit margin of 6%, a total asset turnover ratio of 2, and an equity multiplier of 1.5.  What is its ROE?
3
Profit margin
Total asset turnover
Equity multiplier
ROE
Tony Tony, a small-size investment company, has the following Balance sheet.
Cash $47
Accounts receivable $35
Inventories $117
Net fixed assets $585
Total assets $784
Accounts payable $20
Accruals $10
ST debt $25
LT debt $200
Total common equity $529
$784
1c) What is Tony Tony's Debt-to equity ratio? 3
Total debt
Total common equity
Debt-to-equity ratio

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