Which of the following calculations is correct if sales are $25,000, operating profit after tax is $1,000, the tax rate is 30%, there are no ‘other comprehensive income’ items, operating liabilities (OL) are $5,000, the short-term borrowing rate (STBC) is 3% after tax, and the asset turnover ratio (ATO) is 2? 1. Operating liability leverage (OLLEV) = 0.286 2. RNOA = 0.092 3. RNOA = 0.066 4. Operating profit margin after tax = 0.046

Which of the following calculations is correct if sales are $25,000, operating profit after tax is $1,000, the tax rate is 30%, there are no ‘other comprehensive income’ items, operating liabilities (OL) are $5,000, the short-term borrowing rate (STBC) is 3% after tax, and the asset turnover ratio (ATO) is 2? 1. Operating liability leverage (OLLEV) = 0.286 2. RNOA = 0.092 3. RNOA = 0.066 4. Operating profit margin after tax = 0.046

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 2STP

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