Total asset turnover:
What is Lombardi’s TIE ratio?
43. Miller and Rogers Partnership has P3 million in total assets, P1.65 million in equity, and a
P500,000 capital budget. To maintain the same debt-equity ratio, how much debt should be
44. Standard Company’s bonds have a provision which stipulates that the ratio of senior debt
to total assets will never rise above 45%. The company is at the limit of that ratio and it
wishes to issue still another P25 million in senior debt. How much additional equity
capital must it raise to comply with this restrictive provision?
45. India Oats pays dividends of P0.62 per quarter, and has annual earnings per share of
P2.80. What is India Oats’s dividend yield and dividend payout ratio for 2000,
respectively, if its recent market price is P30.00 and its average market price was P28.00?
46. Assume Meyer Corporation is 100% equity financed. Calculate the return on equity, given
the following information:
(1) Earnings before taxes = P1,500
(2) Sales = P5,000
(3) Dividends payout ratio = 60%
(4) Total asset turnover = 2.0
(5) Tax rate = 30%
47. Beatnik Company has a current ratio of 2.5 and a quick ratio of 2.0. If the firm
experienced P2 million in sales and sustains an inventory turnover of 8.0, what are the
firm’s current assets?