Reference no: EM13343774
1.Consider a retailing firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million.
a. What is the firm’s current ROE?
b. If the firm increased its net profit margin to 4%, what would be its ROE?
c. If, in addition, the firm increased its revenues by 20% (while maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?
2.Find online the annual 10-K report for Peet’s Coffee and Tea (PEET) for 2008. Answer the following questions from their cash flow statement:
a. How much cash did Peet’s generate from operating activities in 2008?
b. What was Peet’s depreciation expense in 2008?
c. How much cash was invested in new property and equipment (net of any sales) in 2008?
d. How much did Peet’s raise from the sale of shares of its stock (net of any purchases) in 2008?
3.Can a firm with positive net income run out of cash? Explain.
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What is the firms current roe
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