57. Debt Management Ratios Tierre’s Ts, Inc. reported a debt to equity ratio of 3 times at
the end of 2013. If the firm’s total assets at year-end are $15 million, how much of their assets is
financed with equity?
58. Debt Management Ratios Paige’s Purses, Inc. reported a debt to equity ratio of 2.4
times at the end of 2013. If the firm’s total assets at year-end are $27 million, how much of their
assets is financed with equity?
59. Debt Management Ratios Calculate the times interest earned ratio for Tierre’s Ts, Inc.
using the following information. Sales = $200,000, cost of goods sold = $50,000, depreciation
expense = $13,000, addition to retained earnings = $70,000, dividends per share = $0.50, tax rate
= 30 percent, and number of shares of common stock outstanding = 1,000. Tierre’s Ts has no
preferred stock outstanding.
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60. Debt Management Ratios Calculate the times interest earned ratio for Paige’s Purses,
Inc. using the following information: sales = $50,000,000, cost of goods sold = $15,000,000,
depreciation expense = $2,000,000, addition to retained earnings = $10,000,000, dividends per
share = $1.10, tax rate = 30 percent, and number of shares of common stock outstanding =
10,000,000. Paige’s Purses has no preferred stock outstanding.
61. Profitability and Asset Management Ratios You are thinking of investing in Tikki’s
Torches, Inc. You have only the following information on the firm at year-end 2011: net income =
$500,000, total debt = $12 million, and debt ratio = 40 percent. What is Tikki’s ROE for 2011?
62. Profitability and Asset Management Ratios You are thinking of investing in Ski Sports,
Inc. You have only the following information on the firm at year-end 2013: net income = $50,000,
total debt = $1 million, and debt ratio = 70 percent. What is Ski’s ROE for 2013?
63. Profitability and Asset Management Ratios You are thinking of investing in Wave
Runnerz, Inc. You have only the following information on the firm at year-end 2013: net income =
$10 million, total debt = $65 million, and debt ratio = 35 percent. What is Wave Runnerz’s ROE
for 2013?
64. Profitability Ratios PJ’s Ice Cream Parlor has asked you to help piece together financial
information on the firm for the most current year. Managers give you the following information:
sales = $50 million, total debt = $20 million, debt ratio = 50 percent, and ROE = 12 percent.
Using this information, what is PJ’s ROA?
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65. Profitability Ratios DJ’s Soda Fountain has asked you to help piece together financial
information on the firm for the most current year. Managers give you the following information:
sales = $20 million, total debt = $3 million, debt ratio = 75 percent, ROE = 27 percent. Using this
information, what is DJ’s ROA?
66. Market Value Ratios Lab R Doors’ year-end price on its common stock is $40. The firm
has total assets of $75 million, the debt ratio is 60 percent, there is no preferred stock, and there
are 4 million shares of common stock outstanding. Calculate the market–to-book ratio for Lab R
Doors.
67. Market Value Ratios Fancy Paws’ year-end price on its common stock is $20. The firm has
total assets of $40 million, the debt ratio is 40 percent, there is no preferred stock, and there are
2 million shares of common stock outstanding. Calculate the market–to-book ratio for Fancy
Paws.
68. Market Value Ratios Lab R Doors’ year-end price on its common stock is $40. The firm
has a profit margin of 10 percent, total assets of $30 million, a total asset turnover ratio of 2, no
preferred stock, and there are 4 million shares of common stock outstanding. What is the PE ratio
for Lab R Doors?
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69. Market Value Ratios Fancy Paws’ year-end price on its common stock is $20. The firm
has a profit margin of 12 percent, total assets of $20 million, a total asset turnover ratio of 0.5, no
preferred stock, and there are 2 million shares of common stock outstanding. What is the PE ratio
for Fancy Paws?
70. DuPont Analysis Last year, PJ’s Ice Cream Parlors, Inc. reported an ROE = 12 percent.
The firm’s debt ratio was 40 percent, sales were $25 million, and the capital intensity ratio was
0.75 times. What is the net income for PJ’s last year?
71. DuPont Analysis Last year, DJ’s Soda Fountains, Inc. reported an ROE = 27 percent. The
firm’s debt ratio was 50 percent, sales were $9 million, and the capital intensity ratio was 1.5
times. What is the net income for DJ’s last year?
72. DuPont Analysis You are considering investing in Totally Tire Services. You have been
able to locate the following information on the firm: total assets = $50 million, accounts
receivable = $10 million, ACP = 15 days, net income = $4.5 million, and debt–to-equity ratio =
0.75 times. What is the ROE for the firm?
73. DuPont Analysis You are considering investing in Lenny’s Lube, Inc. You have been able
to locate the following information on the firm: total assets = $20 million, accounts receivable =
$6 million, ACP = 20 days, net income = $5 million, and debt–to–equity ratio = 2.5 times. What is
the ROE for the firm?
74. Internal Growth Rate Leash N Collar reported a profit margin of 8 percent, total asset
turnover ratio of 1.5 times, debt-to-equity ratio of 0.75 times, net income of $400,000, and
dividends paid to common stockholders of $200,000. The firm has no preferred stock outstanding.
What is Leash N Collar’s internal growth rate?
75. Internal Growth Rate Saddle and Bridle reported a profit margin of 12 percent, total
asset turnover ratio of 2 times, debt–to-equity ratio of 1.9 times, net income of $1 million, and
dividends paid to common stockholders of $250,000. The firm has no preferred stock outstanding.
What is Saddle and Bridle’s internal growth rate?
76. Sustainable Growth Rate You have located the following information on Rock Company:
debt ratio = 40 percent, capital intensity ratio = 2.25 times, profit margin = 8 percent, and
dividend payout ratio = 25 percent. What is the sustainable growth rate for Rock?
77. Sustainable Growth Rate You have located the following information on Greenwich
Company: debt ratio = 60 percent, capital intensity ratio = 0.75 times, profit margin = 13.5
percent, and dividend payout ratio = 80 percent. What is the sustainable growth rate for
Greenwich?
78. Sustainable Growth Rate You have located the following information on Maize
Company: debt ratio = 20 percent, capital intensity ratio = 1.25 times, profit margin = 12 percent,
and dividend payout ratio = 10 percent. What is the sustainable growth rate for Maize?
79. Sustainable Growth Rate You have located the following information on Tyler Company:
debt ratio = 50 percent, capital intensity ratio = 1.5 times, profit margin = 9 percent, and dividend
payout ratio = 40 percent. What is the sustainable growth rate for Tyler?