Sulutions to the suggested problems Chapter 4

Sulutions to the suggested problems Chapter 4 - Chapter 4...

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Chapter 4 Analysis of Financial Statements Solutions of the Suggested End-of-Chapter Problems 4-1 DSO = 40 days; S = $7,300,000; AR = ? DSO=  365 S AR 40 =  /365 000 , 300 , 7 $ AR 40 = AR/$20,000 AR = $800,000. 4-2 A/E = 2.4; D/A = ? 58.33%.   =   0.5833   =   A D 2.4 1   -   1   =   A D E A 1   -   1   =   A D 4-3 ROA = 10%; PM = 2%; ROE = 15%; S/TA = ?; TA/E = ? ROA = NI/A; PM = NI/S; ROE = NI/E. ROA= PM  ×  S/TA NI/A = NI/S  ×  S/TA 10% = 2%  ×  S/TA S/TA= TATO = 5. ROE= PM  ×  S/TA  ×  TA/E NI/E = NI/S  ×  S/TA  ×  TA/E 15% = 2%  ×  5  ×  TA/E 15% = 10%  ×  TA/E TA/E= EM = 1.5.
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4-4 TA   =   $10,000,000,000;   CL   =   $1,000,000,000;   LT   debt   =   $3,000,000,000;   CE   =  $6,000,000,000; Shares outstanding = 800,000,000; P 0  = $32; M/B = ? Book value =  000 , 000 , 800 000 , 000 , 000 , 6 $  = $7.50. M/B = 
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This note was uploaded on 04/21/2009 for the course BUS 338W-1 taught by Professor White during the Winter '09 term at University of Michigan-Dearborn.

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Sulutions to the suggested problems Chapter 4 - Chapter 4...

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