The W.C. Pruett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.15 million, its average tax rate is 25%, and its profit margin is 7%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal places.
TIE: ×
ROIC: %
ANS.
TIE = 8.35
ROIC = 18.375%
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