Business Finance
Northern Essex Community College Profit Margin and Equity Multiplier Paper

Northern Essex Community College

Question Description

I’m studying for my Accounting class and need an explanation.

2.) DEBT TO CAPITAL RATIO – Bartley Barstools has a market/book ratio equal to 1. Its stock price is $145 per share and it has 5 million shares outstanding. The firm’s total capital is $125 million and it finances with only debt and common equity. What is its debt-to-capital ratio?

3.) DuPONT ANALYSIS – Doublewise Dealers has an ROA of 10%, a 2% profit margin, and an ROE of 15%. What is its total assets turnover? What is its equity multiplier?

6.) DuPONT AND ROE – A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are $100 million, and it has total assets of $50 million. What is its ROE?

24.) PICTURE ATTACHED. ANSWER PARTS A, B, C, D, AND E.


PLEASE SHOW WORK ON ALL 4 QUESTIONS. CAN BE DONE ON EITHER MICROSOFT WORD OR EXCEL. THANK YOU IN ADVANCE!!!

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Dupont anylisis a firm has been experiencing low profitability in recent years

Northern Essex Community College Profit Margin and Equity Multiplier Paper
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Final Answer

Attached.

Bartley Barstools has a market/book ratio equal to 1. Its stock
price is $145 per share and it has 5 million shares outstanding.
The firm’s total capital is $125 million and it finances with only
debt and common equity. What is its debt-to-capital ratio?
Market Value of Equity =
Common Stock*Number of
Shares Outstanding

70.000.000,00

Value of Debt in Capital
Structure = Total Capital Market Value of Equity

= 0.02 * (100/50)*2 = 0.08
0,44

Doublewise Dealers has an ROA of 10%, a 2% profit margin,
and an ROE of 15%. What is its total assets turnover? What is
its equity multiplier?

Return on Assets (ROA) = Profit Margin * Total AssetsTurnover
OR
Total Assets Turnover = Return on Assets (ROA) / ProfitMargin
Total Assets Turnover = 10% / 2%
Total Assets Turnover = 5 times
We also know that;
R...

Meowyel_ (306)
Carnegie Mellon University

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