Cairns Travel, Inc. has a total asset turnover of 4.5 and a net profit margin of 4.50%.

Fantastic news! We've Found the answer you've been seeking!

Question:

Cairns Travel, Inc. has a total asset turnover of 4.5 and a net profit margin of 4.50%. The firm has a return on equity of 50.00%.

a) Calculate the company’s debt ratio.

b) Briefly explain how the company’s debt ratio will impact on equity investors.

Related Book For answer-question

Fundamentals Of Investing

ISBN: 9780135175217

14th Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

See More Books

Posted Date: May 06, 2023 01:47 AM

See More Questions

1.A firm has net working capital of $1,100 and current liabilities of $2,800. What is the current ratio? .98 2.56 .39 .72 1.39 Question 2 1.Top Sound, Inc., has total assets of $212,000, a...
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
Debt (or leverage) management ratios Companies have the opportunity to use varying amounts of different sources of financing, including internal and external sources, to acquire their assets, debt...
Two thousand kg of water, initially a saturated liquid at 150C, is heated in a closed, rigid tank to a final state where the pressure is 2.5 MPa. Determine the final temperature, in C. the volume of...
In what ways can you both agree and disagree with the following statement: The Internet, e-mail, text messaging, and instant messaging are making it easier to communicate with people from different...
Can errors still exist in the trial balance if the sum of the debit and credit columns equals the same amount? If so, provide an example.
Consider the following cash flow profile and assume MARR is 10 percent/year. a. What does Descartes' rule of signs tell us about the IRR(s) of this project? b. What does Norstrom's criterion tell us...
Fernandez Corporation purchased a truck at the beginning of 2012 for $50,000. The truck is estimated to have a salvage value of $2,000 and a useful life of 160,000 miles. It was driven 23,000 miles...
The following are the ages of 13 mathematics teachers in a school district. 28, 30, 34, 34, 36, 38, 39, 42, 46, 47, 49, 50, 51 Notice that the ages are ordered from least to greatest. Give the...
The proposed rates were not in the range the CEO expected given the pricing analysis. The CEO has asked the pricing actuary to verify the total projected loss cost excluding potential large storm...
Amy is divorced from Hector. She does not have any dependents and did not remarry before December 31. What is Amy's most advantageous filing status, and what is her standard deduction?
Which is the correct default route mapping within MVC? a. O b. O C. Controller -> View -> Model Model -> Controller -> View Model -> View -> Controller Od. Controller -> Model -> View
can be interpreted as the breakeven financing rate that leads to a profitable project. A. Discounted payback period B. Average accounting return C. Internal rate of return D. Net present value
Example.org uses servers on-premise to host its user accounts and rented storag applications. It is an example for akshi. 2024 akshis O Public cloud Private O Hybnakoud.goley N-2024 Reset cloud...
The process by which managers establish goals and specify how these goals are to be attained is: a. part of budgeting b. planning c. strategic management d. management by objectives e. organizing
Accounting for Asset Retirement Obligations - Comprehensive Information Step 1: Recognition of Asset Retirement Obligations (ARO) Asset Retirement Obligations (ARO) represent legal obligations...
During the first few days of the year, Coast Company entered into the following transactions: Purchased a parcel of land with a building on it for $1,080,000 cash. The building, which will be used in...
Federated Shipping, a competing overnight delivery service, informs the customer in Problem 65 that they would ship the 5-pound package for $29.95 and the 20-pound package for $59.20. (A) If...
Barclays plc is trading at 160 (Pound sterling). Put options with a strike price of 155 are priced at 5.5. What is the intrinsic value of the put option, and what is the time value?
Using the following guidelines, choose the stocksA, B, and Cof three firms that have been public for at least 10 years. Stock A should be one you are interested in buying. Stock B should be a stock,...
Allen Moriarty has bought a round lot of Apple, Inc., common stocks, which are traded on the NYSE at the price of $100 per share. Allen is afraid that the price of Apple stocks may fall during the...
Analyze the monetary policy transmission mechanism.
Explain how an open market purchase of securities by a central bank affects the banking systems balance sheet, and discuss the potential impact on the supply of bank loans.
Explain why monetary policymakers actions in cutting the target range for the federal funds rate to 0 to 14 percent were not sufficient to boost economic activity during the recession of 20072009.

Cairns Travel, Inc. has a total asset turnover of 4.5 and a net profit margin of 4.50%.

Question:

Expert Answer:

a To calculate Cairns Travel Incs debt ratio we need to use the formula Debt Ratio Total Debt Total Assets However we dont have the total debt informa... View the full answer

Fundamentals Of Investing

Students also viewed these finance questions