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

problem_24.jpg

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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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