HW 2.xlsx - Q3-2 a b ROE = operating return nonoperating...

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Q3-2. a. ROE = operating return + nonoperating return, and nonoperating return = financ increasing financial leverage would increase NNO, which would therefore increas b. being highly leveraged increases company risk, since it would mean a drastic incr Q3-3. increase in competition or an increase in cost of goods sold. Usually indicates los market power, but it could also mean that the company is making a shift into usi or that they have lowered their prices and the gross profit margin just hasn’t adj Q3-5. Asset turnover measures how efficiently a company is using their assets to gener Q3-6. If ROE > RNOA, that means that the company is mainly financed through debt, w would show it's mainly financed through equity Q3-8. a tax shield is a reduction in income taxes from tax deductable expenses such as Q3-9. net means that it's the value of the assets after deducting the value of the opera get the true asset value M3-26. Company Ticker 2015 Sales 2015 NI 2015 Assets Macys M 27,079 1,072 20,576 a. ROE 2015 = 22.27% b. PM 2015 = 3.96% AT 2015 = 129.24% FL 2015 = 435.25% ROE 2015 = 22.27% M3-27. Company Ticker 2015 Sales
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