Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 4, Problem 7SP
(Analyzing operating
- a. What was Winston’s total asset turnover ratio?
- b. During the coming year the company president has set a goal of attaining a total asset turnover of 3.5. How much must firm sales rise, other things being the same, for the goal to be achieved? (State your answer in both dollars and percentage increase in sales.)
- c. What was Winston’s operating return on assets last year? Assuming the firm’s operating profit margin remains the same, what will the operating return on assets be next year if the total asset turnover goal is achieved?
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(Profitability analysis) Last year Triangular Resources earned $4.6 million in net operating income and had an
operating profit margin of 19.7 percent. If the firm's total asset turnover ratio was 1.56, what was the firm's
investment in total assets?
The company's total assets are $ million. (Round to one decimal place.)
You have the following data for a company. What is the return on assets (ROA)? Return on equity = 15%; Earnings before taxes = $150,000; Total asset turnover = 1.8; Profit margin = 10.5%; Tax rate = 30%.
Required:
1. Compute the company's average operating assets for last year.
2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)
3. What was the company’s residual income last year?
Chapter 4 Solutions
Foundations Of Finance
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