In February 2018, newspaper reports referred to a retailers balance sheet including intangible assets such as brand

Question:

In February 2018, newspaper reports referred to a retailer’s balance sheet including intangible assets such as brand names and goodwill of almost $1 billion as being much higher than market value. If the value of these intangibles was written down:

1. What would be the effect on net profit?

2. What would be the effect on total assets?

3. What key ratios would be affected?

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