Question

using excel sheet to calculate

1. Firm A's sales last year = $280,000, net income = $23,000.  What was its profit margin? (8.21%)

2. Firm A’s total assets = $415,000 and its net income = $32,750.  What was its return on total assets (ROA)?(7.89%)

3. Firm A’s total common equity = $405,000 and its net income = $70,000.  What was its ROE? (17.28%)

4. Firm A’s stock price at the end of last year = $23.50 and its earnings per share for the year = $1.30.  What was its P/E ratio? (18.08)

5. Meyer Inc's assets are $625,000, and its total debt outstanding is $185,000.  The new CFO wants to establish a debt/assets ratio of 55%.  The size of the firm does not change.  How much debt must the company add or subtract to achieve the target debt ratio? ($158,750)

6. Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt).  Its sales for the last year were $595,000, and its net income was $25,000.  Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%.  What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? (9.45%)

7. A firm has $300 in inventory, $600 in fixed assets, $200 in accounts receivable, $100 in accounts payable, and $50 in cash. What is the amount of the current assets? ($550)

8. Art's Boutique has sales of $640,000 and costs of $480,000. Interest expense is $40,000 and depreciation is $60,000. The tax rate is 34%. What is the net income? ( $39,600)

9. Use the following information to prepare the cash flow statement in 2008 of Nabors, Inc.  Calculate FCF.

Answer 1