Evaluate the grocery chain's claim. What is the basis for the statement? Is this claim misleading? Why or why not?
29. Using the Du Pont Identity. The Rainbow Company has net income of $132,500. There are currently 29.70 days' sales in receivables. Total assets are $820,000. total receivables arc $138,600, and the debt-equity ratio is 0.60. What is the company's prolit margin? Its total asset turnover? Its ROE?
30. Calculating the Cash Coverage Ratio. Delectable Turnip Inc.'s net income for the most recent year was $10,508. The tax rate was 34 percent. The firm paid $3,685 in total interest expense and deducted $4,382 in depreciation expense. What was the company's cash coverage ratio for the year?
31. Calculating the Times interest Earned Ratio. For the most recent year, Fame, Inc., had sales of $378,000, cost of goods sold of $95,400, depreciation expense of $47,000, and additions to retained earnings of $48,750. The firm currently has 20,000 shares of common stock outstanding, and the previous year's dividends per share were $1.40. Assuming a 34 percent income tax rate, what was the times interest earned ratio?
32. Return on Assets. A fire has destroyed a large percentage of the financial records of the Inferno Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 16.5 percent. Sales were $1,625,000, the total debt ratio was 0.30, and total debt was $648,000. What is the return on assets (ROA)?
33. Ratios and Foreign Companies. Prince Albert Canning PLC had a 2008 net loss of £16,182 on sales of £238,165 (both in thousands of pounds). What was the company's profit margin? Does the fact that these figures are quoted in a foreign currency make any difference? Why? In dollars, sales were $454,058. What was the net toss in dollars?
Some recent financial statements for Smolira Golf, Inc., follow. Use this information to work Problems 34 through 37.
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