Reference no: EM13884828
Question-
PSU Manufacturing Inc. has the following financial statements data for 2012.
Income Statement
Sales $102,500
Cost of Goods $50,000
SG & E Expenses $35,000
EBIT $17,000
Interest Expenses $2,500
Taxes $6,000
Net Income $9,000
Balance Sheet
Cash $40,000
Fixes Assets $55,000
Total Assets $95,000
Accounts Payable $12,000
Long-term Debt $25,000
Retained Earnings $28,000
Paid-in Common Equity $30,000
Use the financial information and
a. Compute the firm's net profit margin, total asset turnover and financial leverage multiplier (also known as the equity multiplier).
b. Explain what each of the three ratios above tell you about the firm's performance and how they combine to form the firm's return on equity
c. The financial data for the firm's major competitors show that on an average a net profit margin of 16%, total asset turnover of 1.25, but comparable leverage. Identify some possible business decisions that the firm could make so that it would be as attractive an investment as its competitors.
Additional information-
This question belongs to Basics Finance and it's about computing the firm's net profit margin, total asset turnover, return on equity, financial leverage multiplier etc. A comparison with the firm's major competitors has been given and based on the information, possible business decisions have to be given to the firm regarding attractive investment.
|
Explain how credit risk can be reduced
: Is there credit risk in an interest rate swap with an intermediary bank serving as the swap dealer? Describe when default losses might arise and which party is at risk. Explain how credit risk can be reduced.
|
|
What the linear acceleration of its centre of mass
: The rope shown in the figure attached hereto is wound around a cylinder of of mass 4.0 kg, radius 10 cm and I =0.020kgm2, where I is the moment of inertia about an axis along the cylinder axis. If the cylinder rolls without slipping, what the line..
|
|
Explain how credit risk can be reduced
: Is there credit risk in an interest rate swap with an intermediary bank serving as the swap dealer? Describe when default losses might arise and which party is at risk. Explain how credit risk can be reduced.
|
|
Compute the firm net profit margin
: Compute the firm's net profit margin, total asset turnover and financial leverage multiplier (also known as the equity multiplier)
|
|
Construct two gene expression clustering algorithms using r
: CLUSTERING GENE EXPRESSION DATA USING R LANGUAGEConstruct two gene expression clustering algorithms using R.Select the best algorithm and construct a third improved algorithm.
|
|
Mccaskeys first day in newly created position of material
: McCaskey is eagerly awaiting her first real-world problem. At approximately 8:30 A.M. it arrives in the form of status reports on inventory and orders shipped. At the top of an extensive computer printout is a handwritten note from Joe Donnell, the p..
|
|
How much more interest will and investor earn
: How much more interest will and investor earn by placing $15,000 in a 180 day GIC than by purchasing two consecutive 90 day GICs? Assume that interest rates do not change over the next 90 days and that interest earned from the first 90 day GIC wil..
|
|
Assume the change in mass of the paps to be negligible
: You are part of a design team for future exploration of the planet Mars, whereg= 3.7m/s2. An explorer is to step out of a survey vehicle traveling horizontally at 33m/s when it is 1200m above the surface and then fall freely for 20s.
|