Homework Help
Question 1. 1.(tcos 1, 8, 9) using the security market line formula
Question 1. 1.(tcos 1, 8, 9) using the security market line formula.
Question 3. 3.(TCO 6) Calculate the five ratios for the following company info.
Income Statement Balance Sheet
Revenue 10,000 Assets Liab. + OE
EBIT $2,000 cash $10,000 a/p $2,000
Interest $500 A/R $1,000 Bonds payable $50,000
Earnings B4 Tax $1,500 Equip $25,000 equity $84,000
EAT (at 40%) $900 Bldg $100,000
Total $136,000 $136,000
– return on sales
– ROA
– ROE
– fixed asset turnover
– times interest earned
(Points : 20)
Return on sales = 900/10000 = 9% ROA = (900*(1-.4))/136000 = .40% ROE = 900/84000 = 1.07% Fixed asset turnover = 10000/125000 = .08 Times interest earned = 2000/500 = 4
Question 1. 1.(tcos 1, 8, 9) using the security market line formula