Assume the following relationships for the Caulder Corp.:

$$\begin{array}{ll} \text { Sales/Total assets } & 1.3 \times \\ \text { Return on assets (ROA) } & 4.0 \text{ percent } \\ \text { Return on equity (ROE) } & 8.0 \text{ percent } \end{array}$$

Calculate Caulder’s profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital.

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

Sales/total assets 1.2

Return on assets (ROA) 4%

Return on equity (ROE) 7%

Calculate Haslam’s profit margin and liabilities-to-assets ratio. Suppose half its liabilities are in the form of debt. Calculate the debt-to-assets ratio.

Midwest Packaging's ROE last year was only $3 \%$; but its management has developed a new operating plan that calls for a debt-to-capital ratio of $60 \%$, which will result in annual interest charges of $\$ 300,000$. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $\$ 1,000,000$ on sales of $\$ 10,000,000$, and it expects to have a total assets turnover ratio of $2.0$. Under these conditions, the tax rate will be $34 \%$. If the changes are made, what will be the company's return on equity?

Arrow Distributing Corp. (see Table 9) likes to track inventory by using weeks of supply as well as by inventory turnover.

What is Arrow's inventory turnover?

Following is selected financial data for Boardwalk for the year ended December 31, 2011.

Required
Prepare the 2011 statement of owner’s equity for Boardwalk.

Assume that you are given the following relationships for Zumwalt Corporation:

$$\begin{array}{lrlr} \text{Sales/total assets} &{1.5 \times} \\ \text{Return on assets (ROA)} & {3.0 \%} \\ \text{Return on equity (ROE)} & {5.0 \%} \\ \end{array}$$

Calculate Zumwalt's net profit margin and debt ratio.

Arrow Distributing Corp. (see Table 9) likes to track inventory by using weeks of supply as well as by inventory turnover.

What is its weeks of supply?

Pacific Packaging’s ROE last year was only 5%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 40%, which will result in annual interest charges of $561,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of$1,258,000 on sales of $17,000,000, and it expects to have a total assets turnover ratio of 2.1. Under these conditions, the tax rate will be 35%. If the changes are made, what will be the company’s return on equity?

A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million, and it has total assets of$60 million. What is its ROE?

Ferrell Inc. recently reported net income of $8 million. It has 540,000 shares of common stock, which currently trades at$21 a share. Ferrell continues to expand and anticipates that 1 year from now, its net income will be $13.2 million. Over the next year, it also anticipates issuing an additional 81,000 shares of stock so that 1 year from now it will have 621,000 shares of common stock. Assuming Ferrell’s price/earnings ratio remains at its current level, what will be its stock price 1 year from now?

A company has an EPS of $2.40, a book value per share of$21.84, and a market/book ratio of 2.7$\times$. What is its P/E ration?

Precious MetalMining has $17 million in sales, its ROE is 17$\times$. Common equity on the firm’s balance sheet is 50% of its total assets. What is its net income?

You are given the following information:

Stockholders' equity as reported on the firm's balance sheet $=\$ 3.75$ billion, price/earnings ratio $=3.5$, common shares outstanding $=50$ million, and market/book ratio $=1.9$. Calculate the price of a share of the company's common stock.

You are given the following information: Stockholders’ equity as reported on the firm’s balance sheet =$6.5 billion, price earnings ratio =9, common shares outstanding =180 million, and market/book ratio =2.0. Calculate the prie of a share of the company's common stock.