Calculate haslams profit margin and liabilities

Assignment Help Financial Management

Reference no: EM132858626

PROBLEM SET 1

1; Holly's Art Galleries recently reported $7.9 million of net income. Its EBIT was $15 million, and its federal tax rate was 21% (ignore any possible state corporate taxes). What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $7.9 million net income by 1 - T = 0.79 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.

Kendall Corners Inc. recently reported net income of $3.3 million and depreciation of $700,000. What was its net cash flow? Assume it had no amortization expense. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round you answer to the nearest dollar.

3; Statement of Retained Earnings

In its most recent financial statements, Del-Castillo Inc. reported $45 million of net income and $840 million of retained earnings. The previous retained earnings were $805 million. How much in dividends did the firm pay to shareholders during the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.

4;Needham Pharmaceuticals has a profit margin of 4% and an equity multiplier of 1.6. Its sales are $110 million and it has total assets of $60 million. What is its return on equity (ROE)? Do not round intermediate calculations. Round your answer to two decimal places.

5;Profit Margin and Debt Ratio

Assume you are given the following relationships for the Haslam Corporation:

Sales/total assets	1.7
Return on assets (ROA)	4%
Return on equity (ROE)	7%

Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places.

Profit margin: %
Liabilities-to-assets ratio: %
Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.

Times-Interest-Earned Ratio

The Morrit Corporation has $900,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrit's annual sales are $6 million, its average tax rate is 25%, and its net profit margin on sales is 5%. If the company does not maintain a TIE ratio of at least 4 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morrit's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.

Attachment:- PROBLEM SET.rar

Reference no: EM132858626

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