31. See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.
• a. How did Mydeco’s accounts receivable days change over this period?
• b. How did Mydeco’s inventory days change over this period?
• c. Based on your analysis, has Mydeco improved its management of its working capital during this time period?
TABLE 2.5 2009–2013 Financial Statement Data and Stock Price Data for Mydeco Corp.
Mydeco Corp. Please see the Attached File I've attached all the 4 Question.
36. You are analyzing the leverage of two firms and you note the following (all values in millions of dollars):
Debt Book Equity Market Equity EBIT Interest Expense
Firm A 500 300 400 100 50
Firm B 80 35 40 8 7
• a. What is the market debt-to-equity ratio of each firm?
• b. What is the book debt-to-equity ratio of each firm?
• c. What is the EBIT/interest coverage ratio of each firm?
• d. Which firm may have more difficulty meeting its debt obligations? Explain.
42. For fiscal year 2011, Starbucks Corporation (SBUX) had total revenues of $11.70 billion, net income of $1.25 billion, total assets of $7.36 billion, and total shareholder’s equity of $4.38 billion.
• a. Calculate the Starbucks’ ROE directly, and using the DuPont Identity.
• b. Comparing with the data for Peet’s in Problem 41, use the DuPont Identity to understand the difference between the two firms’ ROEs.
43. Consider a retailing firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million.
• a. What is the firm’s current ROE?
• b. If the firm increased its net profit margin to 4%, what would be its ROE?
• c. If, in addition, the firm increased its revenues by 20% (while maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?
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