1. Goodyear Pharma has an ROE of 24% based on its profit margin of 6%, equity multiplier of 4, sales of $200M, and total assets of $50M.
2. Waco Pharma has a P/E ratio of 8 based on its EPS of $3.00 and P/CF ratio of 8.
3. For Georgia Inc. with a debt ratio of 0.4, its equity multiplier is 1.67.
1. Goodyear Pharma has an ROE of 24% based on its profit margin of 6%, equity multiplier of 4, sales of $200M, and total assets of $50M.
2. Waco Pharma has a P/E ratio of 8 based on its EPS of $3.00 and P/CF ratio of 8.
3. For Georgia Inc. with a debt ratio of 0.4, its equity multiplier is 1.67.
1. Goodyear Pharma has an ROE of 24% based on its profit margin of 6%, equity multiplier of 4, sales of $200M, and total assets of $50M.
2. Waco Pharma has a P/E ratio of 8 based on its EPS of $3.00 and P/CF ratio of 8.
3. For Georgia Inc. with a debt ratio of 0.4, its equity multiplier is 1.67.
1. Goodyear Pharma has an ROE of 24% based on its profit margin of 6%, equity multiplier of 4, sales of $200M, and total assets of $50M.
2. Waco Pharma has a P/E ratio of 8 based on its EPS of $3.00 and P/CF ratio of 8.
3. For Georgia Inc. with a debt ratio of 0.4, its equity multiplier is 1.67.
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Class Work Chapter 3
1. Goodyear Pharma has a profit margin of 6% and an equity multiplier of 4. Its
sales is $200 M and Total Assets $50M. What is its ROE?
2. Waco Pharma has a EPS of $3.00, and Cash flow Per share of $4.00. Its Price/Cash flow ratio is 8.0. What is its P/E ratio?
3. Georgia Inc. has a debt ratio of 0.40 What is its Equity Multiplier?
4. ABC Bank does require businesses to have a TIE of at least 4.0. Scott Industries currently has EBIT of $5M and a debt of $10M at 10% interest rate. How much more does Scott Industries have room to borrow at 10% interest rate without running afoul of Banks Debt requirements? Table 1 BALANCE SHEET Cole Eagan Enterprises December 31, 2010 Cash $ 4,500 Accounts Payable $ 10,000 Accounts Receivable Notes Payable Inventories Accruals 1,000 Total Current Assets Total Current Liability Net Fixed Assets Long-Term Debt Stockholder’s Equity
Total Assets Total Liability &
Stockholder’s Equity
Information (2010 values)
1. Sales totaled $110,000.
2. The gross profit margin was 25 percent. 3. Inventory turnover was 3.0. 4. There are 360 days in the year. 5. The average collection period was 65 days. 6. The current ratio was 2.40. 7. The total asset turnover was 1.13. 8. The debt ratio was 53.8 percent.
5. Inventory for CEE in 2010 was ________. (See Table 1)
A. $36,667 B.$32,448 C.$27,500 D.$ 9,167
6. Notes payable for CEE in 2010 was ________. (See Table 1)
A.$113,466 B. $ 52,372 C. $ 41,372 D. $ 10,609 7. . Accounts receivable for CEE in 2010 was ________. (See Table 1) A. $14,056 B. $19,861 C. $14,895 D. $18,333
8. Net fixed assets for CEE in 2010 were ________. (See Table 1) A.$45,484 B. $48,975 C.$54,511 D.$69,341
9. Total assets for CEE in 2010 were ________. (See Table 1)
A. $ 45,895 B.$124,300 C.$ 58,603 D. $ 97,345
10. Long-term debt for CEE in 2010 was ________. (See Table 1) A.$30,763 B.$52,372 C.$10,608 D.$41,372
