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MNF Corporation Gathered the Following Data at the End of the Accounting

Question 113

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MNF Corporation gathered the following data at the end of the accounting period,December 31,2009:
 Net income $60,000 Net sales revenue 1,200,000 Interest expense 25,000 Total liabilities 200,000 Average stockholders’ equity (50,000 shares 300,000 outstanding)  Dividends declared and paid during 200922,500 Market price per share of stock at year end 9 Average income tax rate 40% Requirements \begin{array}{lrl}\text { Net income } & \$ 60,000 \\\text { Net sales revenue } & 1,200,000 \\\text { Interest expense } & 25,000 \\\text { Total liabilities } & 200,000 \\\text { Average stockholders' equity }(50,000 \text { shares } & 300,000 \\\text { outstanding) } & \\\text { Dividends declared and paid during } 2009 & 22,500 \\\text { Market price per share of stock at year end } & 9 \\\text { Average income tax rate } &40\% \\\text { Requirements } &\end{array} Part 1:
Calculate each of the following ratios:
A.Profit margin
B.Return on equity
C.Earnings per share
D.Dividend yield ratio
E.Price/earnings ratio
F.Return on assets
G.Financial leverage percentage
Part 2:
Interpret the financial leverage percentage.

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