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Selected information from the balance sheet of Yogi Corp. for a recent year are provided below: Sales 37,213 Net Income 1,825 Total Assets 20,000 Total Liabilities 7,444 Stockholder’s Equity 12,556 Interest Expense 370 Tax Rate 38% Assets include: cash $420, short-term investments $1000, A/R $580, PPE $18000. Liabilities include: A/P $5500, short-term debt $44, Deferred Tax Liabilities $1500, and long-term debt $400 Compute RNOA and ROE Is leverage beneficial or detrimental to the company

Selected information from the balance sheet of Yogi Corp. for a recent year are provided below: Sales 37,213 Net Income 1,825 Total Assets 20,000 Total Liabilities 7,444 Stockholder’s Equity 12,556 Interest Expense 370 Tax Rate 38% Assets include: cash $420, short-term investments $1000, A/R $580, PPE $18000. Liabilities include: A/P $5500, short-term debt $44, Deferred Tax Liabilities $1500, and long-term debt $400 Compute RNOA and ROE Is leverage beneficial or detrimental to the company

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
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Selected information from the balance sheet of Yogi Corp. for a recent year are provided below:

Sales 37,213

Net Income 1,825

Total Assets 20,000

Total Liabilities 7,444

Stockholder’s Equity 12,556

Interest Expense 370

Tax Rate 38%

Assets include: cash $420, short-term investments $1000, A/R $580, PPE $18000.

Liabilities include: A/P $5500, short-term debt $44, Deferred Tax Liabilities $1500, and long-term debt $400

  1. Compute RNOA and ROE
  2. Is leverage beneficial or detrimental to the company
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