Fin 335 CH 4 - 1 . Chapter 4 Ramala Corp's sales last year...

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Chapter 4 1 . Ramala Corp's sales last year were $48,000, and its total assets were $25,500. What was its total assets turnover ratio (TATO)? a. 1.88 b. 1.99 c. 1.10 d. 1.21 e. 1.32 2 . Ruby Corp's sales last year were $435,500, its operating costs were $350,000, and its interest charges were $10,000. What was the firm's times interest earned (TIE) ratio? a. 8.29 b. 8.42 c. 8.55 d. 8.68 e. 8.81 3 . Roberts Corp's sales last year were $300,000, and its net income after taxes was $25,000. What was its profit margin on sales? a. 7.65% b. 7.82% c. 7.99% d. 8.16% e. 8.33% 4 . Reynolds Corp's total assets at the end of last year were $300,000 and its net income after taxes was $25,000. What was its return on total assets? a. 8.15% b. 8.33% c. 8.51% d. 8.69% e. 8.87% 5 . Rollins Corp's total assets at the end of last year were $300,000 and its EBIT was $75,000. What was its basic earning power (BEP)? a. 17.50% b. 20.00% c. 22.50% d. 25.00% e. 27.50% 6 . Raleigh Corp's total common equity at the end of last year was $300,000 and its net income after taxes was $55,000. What was its ROE? a. 18.33% b. 18.67% c. 19.00% d. 19.33% e. 19.67% 7 . Rutland Corp's stock price at the end of last year was $30.25 and its earnings per share for the year were $2.45. What was its P/E ratio? a. 11.65 Chapter 4: Analysis of Financial Statements Page 1
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c. 12.35 d. 12.70 e. 13.05 8 . Rand Corp's stock price at the end of last year was $40.00, and its book value per share was $24.50. What was its Market/Book ratio? a. 1.03 b. 1.18 c. 1.33 d. 1.48 e. 1.63 9 . Midwest Lumber had a profit margin of 5.1%, a total assets turnover of 1.6, and an equity multiplier of 1.8. What was the firm's ROE? a. 14.39% b. 14.69% c. 14.99% d. 15.29% e. 15.59% 10 . An investor is considering starting a new business. The company would require $500,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 15.0% return on the invested capital, which means that the firm must have an ROE of 15.0%. How much net income must be expected to warrant starting the business? a. $45,000 b. $55,000 c. $65,000 d. $75,000 e. $85,000 11 . Rolle Corp has $500,000 of assets, and it uses no debt--it is financed only with common equity. The new CFO wants to employ enough debt to bring the Debt/ Assets ratio to 45%, using the proceeds from the borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio? a. $225,000 b. $240,000 c. $255,000 d. $270,000 e. $285,000 12 . Rull Corp's assets are $500,000, and its total debt outstanding is $200,000. The new CFO wants to employ a debt ratio of 60%. How much debt must the company add or subtract to achieve the target debt ratio? a. $ 80,000
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Fin 335 CH 4 - 1 . Chapter 4 Ramala Corp's sales last year...

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