Baker Industries’ net income is $26000, its interest expense is $5000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals $70000, and common equity equals $260000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Baker Industries’ net income is $26000, its interest expense is $5000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals $70000, and common equity equals $260000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 1PEB: Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40%...
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Baker Industries’ net income is $26000, its interest expense is $5000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals $70000, and common equity equals $260000. The firm finances with only debt and common equity, so it has no
What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Transcribed Image Text:ROE and ROIC
Net income
Interest expense
Tax rate
Notes payable
Long-term debt
Common equity
ROE
Partial Income Statement:
EBIT
Interest
EBT
Taxes
Net income
Capital Summary:
Notes payable
Long-term debt
Common equity
Total invested capital
ROIC
$26,000
$5,000
45.00%
$25,000
$70,000
$260,000
$5,000.00
$26,000.00
$25,000.00
$70,000.00
$260,000.00
Formulas
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