Jane Corp. had a net profit margin of 6% last year and an equity multiplier of 4.0.
Question:
Jane Corp. had a net profit margin of 6% last year and an equity multiplier of 4.0. If its total assets are $250 million, what is the firm's return on equity?
b). Excerpts of The Tree Ltd.'s financial results for the years ended December 31, 2019 and December 31, 2020 are as follows:
2020 2019
Total Current Assets $550,000 $710,000
Quick Assets $300,000 $450,000
Total Assets $920,000 $1,080,000
Total Current Liabilities $383,000 $300,000
Total Debt $790,000 $630,000
EBIT $660,000 $875,000
Interest Expense $40,700 $33,000
Net Income ? ?
i). Assuming a corporate tax rate of 25%, what is the Net Income of the company for both years?
ii). What is the Working Capital and Acid Test Ratio of the company for both years?
iii). What is the Return on Assets for the company for both years?
iv). What is the Debt Ratio of the company for both years?
v). What is the TIE Ratio of the company for both years?
vi). Given the ratios calculated above, provide a brief analysis of your findings.
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi