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Homework answers / question archive / 1) Intro A company has sales of $39,000 and total costs of $29,000, including depreciation and interest expenses

1) Intro A company has sales of $39,000 and total costs of $29,000, including depreciation and interest expenses

Business

1) Intro

A company has sales of $39,000 and total costs of $29,000, including depreciation and interest expenses. The average tax rate is 50%.

Total assets are $74,000 and total equity is $40,000.

QUESTION

- What is the profit margin?

2) Intro

Use the following information to answer the questions:

Assets   Liabilities and Equity
Cash 13,000   Accounts payable 21,000
Marketable securities 4,000   Notes payable 8,000
Accounts receivable 9,000   Current liabilities 29,000
Inventory 26,000   Long-term debt 80,000
Current assets 52,000   Total liabilities 109,000
Machines 42,000   Paid-in capital 30,000
Real estate 60,000   Retained earnings 15,000
Net fixed assets 102,000   Equity 45,000
Total assets 154,000   Total liab. & equity 154,000
Income statement  
Sales 430,000
Operating expenses 387,000
Depreciation 25,000
EBIT 18,000
Interest 5,000
Taxable income 13,000
Taxes 4,290
Net income 8,710

There are 9,000 shares outstanding, each currently trading for $8.22.

QUESTION

- What is the enterprise value-EBITDA ratio?

- What is the profit margin?

- What is ROE?

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