Corporate Finance: A Focused Approach (mindtap Course List)
7th Edition
ISBN: 9781337909747
Author: Michael C. Ehrhardt, Eugene F. Brigham
Publisher: South-Western College Pub
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Chapter 3, Problem 6P
Summary Introduction
To calculate: The total asset turnover and the equity multiplier of the firm.
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Gardial & Son has an ROA of 12%, a 5% profit margin, and a return onequity equal to 20%. What is the company’s total assets turnover? What isthe firm’s equity multiplier?
Triangular Chemicals has total assets of
$99
million, a return on equity of
41
percent, a net profit margin of
5.4
percent, and an equity multiplier of
2.08.
How much are the firm's sales?
Gardial & Son has an ROA of 12%, a 4% profit margin, and a return on equity equal to 11%.
What is the company's total assets turnover? Round your answer to two decimal places.
What is the firm's equity multiplier? Round your answer to two decimal places.
Chapter 3 Solutions
Corporate Finance: A Focused Approach (mindtap Course List)
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Over the past year, M. D. Ryngaert Co. has...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4P
Ch. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Ace Industries has current assets equal to 3...Ch. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Complete the balance sheet and sales information...Ch. 3 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 1MCCh. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - Prob. 5MCCh. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Prob. 9MCCh. 3 - Prob. 10MC
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- Triangular Chemicals has total assets of $107 million, a return on equity of 42%, a net profit margin of 4.9 %, and an equity multiplier of 2.18. How much are the firm’s sales?arrow_forwardNaraine Cars has sales of $3,850, total assets of $4,350, and a profit margin of 5 percent. The firm has a total debt ratio of 20 percent. What is the return on equity?arrow_forwardFirm M has a margin of 12%, turnover of 1.5, sales of $870,000, and average stockholders' equity of $360,000. Calculate Firm M’s average total assets, net income, return on investment (ROI), and return on equity (ROE).arrow_forward
- McCormack co. Wishes to maintain a growth rate of 6 percent a year, a debt equity ratio of 0.49, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.41. What profit margin must the firm achieve?arrow_forwardIf Rooters, Inc., has an equity multiplier of 1.90, total asset turnover of 1.20, and a profit margin of 8 percent, what is its ROE?arrow_forwardBryley, Inc. earned a net profit margin of 5.5 percent last year and had an equity multiplier of 2.56. If its total assets are $105 million and its sales are $142 million, what is the firm's return on equity?arrow_forward
- Triangular chemicals has total assets of $107 million, a return on equity of 35 percent, a net profit margin of 5.5 percent, and an equity multiplier of 2.25. How much are the firm’s sales? The company’s total sales are Round to one decimal place.arrow_forwardjPhone, Inc., has an equity multiplier of 1.44, total asset turnover of 1.73, and a profit margin of 11 percent. What is the company's ROE?arrow_forwardZelle Inc. had a net profit margin of 5% last year and an equity multiplier of 4.0. If its total assets are $120 million and $180 million of total sales, what is the firm’s return on equity?arrow_forward
- A firm wishes to maintain a growth rate of 11 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 8.1 percent. If the firm also wishes to maintain a constant debt equity ratio, what must it be?arrow_forwardA firm has a ROE of 16.875%, asset turnover of 2.5, and an equity multiplier of 1.5. If the firm has sales revenue of $10,000, what is the net income?arrow_forwardIf Roten Rooters, Inc., has an equity multiplier of 1.58, total asset turnover of 1.80, and a profit margin of 6.8 percent, what is its ROE?arrow_forward
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