Finance ch. 4 - $2,340.0 Total current liabilities $1,800.0...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
16. The Carter Co.'s return on equity (ROE) is 18%. If sales were $4 million, the debt ratio was 40%, and total liabilities were $2 million, what would be Carter's return on assets (ROA)? A) 12.60% B) 10.80% C) Insufficient information. D) 0.80% E) 1.25% Points Earned: 5.0/5.0 Correct Answer(s): B 17. SCENARIO 4-1 The balance sheet and income statement shown below are for Byrd Inc, and the data are to be used for the following questions. Note that the firm has no amortization charges, it does not lease any assets, and none of its debt must be retired during the next 5 years (notes payable will be rolled over). BALANCE SHEET Cash $ 140.0 Accounts payable $ 800.0 Accts. receivable 880.0 Notes payable 600.0 Inventories 1,320.0 Accruals 400.0 Total current assets
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: $2,340.0 Total current liabilities $1,800.0 Long-term bonds 1,000.0 Total debt $2,800.0 Common stock (50,000 shares) 200.0 Retained earnings 1,000.0 Net plant & equip. 1,660.0 Total common equity $1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 INCOME STATEMENT Net sales $6,000.0 Operating costs 5,599.8 Depreciation 100.2 EBIT $ 300.0 Less: Interest 96.0 EBT $ 204.0 Less: Taxes 81.6 Net income $ 122.4 OTHER DATA Shares outstanding (millions) 60.00 Common dividends $42.8 Interest rate on N/P and long-term bonds 6.0% Federal plus state income tax rate 40% Year-end stock price $30.60 What is the firm's EBITDA coverage? A) 3.51 B) 4.17 C) 3.88 D) 4.04 E) 3.69 Points Earned: 0.0/5.0 Correct Answer(s): B...
View Full Document

This note was uploaded on 11/04/2009 for the course BUS FIN 2100 taught by Professor Shmidl during the Spring '09 term at Laramie County Community College.

Page1 / 2

Finance ch. 4 - $2,340.0 Total current liabilities $1,800.0...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online