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The following information regarding ABC Company for 2019 has been assembled: Market value of the firm...

  1. The following information regarding ABC Company for 2019 has been assembled:

Market value of the firm at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . $2400,000

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $400,000

Debt ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40%

Return on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10%

Asset turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0

Compute the following and interpret the results (1 mark each-total 4 marks).

a. Total assets                              b. Sales

c. Net income                              d. Price-earnings ratio

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