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FI515_Homework2_Brandon Davis - 3-1 20 =...

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3-1 20 = RECEV/$20,000$20000*20= RECEVRECEV = $400,000 3-2 Debt ratio = 1-equity ratio Equity ratio = 1/Equity multiplier Em=2.5 1/2.5=ERER=.4 1-.4=Debt ratio DR=.6 or 60% 3-3 BVPS=CE/SO M/B ratio=MPPS/BVPS CE= 6 BILLION SO=800 MILLION MPPS=$756000/800=bvps =7.5 $75/$7.50=M/B RATIO = 10.0 3-4 PRICE/EARNINGS RATIOPE RATIO =PRICE PER SHARE/EARNINGS PER SHARE PE=PPS/EPS EPS=1.50 CFPS=3.00 P/C RATIO= 8.0 , P/C RATIO= PPS/CFPS , 8.0=PPS/3.00 =3.00*8.00=PPS ,PPS=24.00 p/e RATIO = 24.00/EPS, 24.00/1.5, P/E RATIO = 16.0 3-5 ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity) PM 3% EM=2.0 SALES=100 MILLION TOTAL ASSETS=50 MILLION TOTAL ASSET TURNOVER= SALES/ASSETS
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TAT= 100m/50M= 2MIL ROE= Pm=.03*TAT=2MIL*EM=2.0, ROE=.03*2MIL*2.0, ROE= .12 OR 12% 3-6 ROA=10%, PM=2%, ROE=15% TOTAL ASSET TURNOVER ROA=PM*TAT TAT = ROA/PM, TAT=.10/.02, TAT=5.0 EQUITY MULTIPLIER ROE=ROA*EM EM=ROE/ROA, EM=.15/.10, EM=1.5 3-7 CURRENT ASSETS=3MIL , CURRENT RATIO=1.5, QUICK RATIO=1.0 CURRENT LIABILITES
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