Project2-Intermediate II - International Report Case...

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Unformatted text preview: International Report Case (Sepracor Inc.) a) Compute the following ratios for Sepracor, Inc. 1. Return on assets = Net Income/ Average Net Assets = $58,333/1,404,726 = 4.2% 2. Return on stockholders equity = Net Income/Shareholder’s equity = $58,333/176,414 = 3.3% 3. Debt to assets ratio = Total Liabilities/Total Assets = $1,228,313/1,404,726 = 87% b) Briefly discuss the operating performance and financial position of Sepracor. Industry averages for these ratios in 2007 were: ROA 3.5%, return on equity 16%, and debt to assets 75%. Based on this analysis would you make an investment in the company’s 5% convertible bonds? Explain. I would have to really evaluate this. The industry is a bit lower than Sepracor when it comes to the ROA & ROE. However, the overall rate is still substantially low. The ROA, ROE measures the company’s ability to utilize their investments low....
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This note was uploaded on 04/22/2010 for the course ACCT ACC552 taught by Professor Hint during the Spring '09 term at Keller Graduate School of Management.

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Project2-Intermediate II - International Report Case...

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