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Slow Corporation Reported the Following Data for the Year Ended

Question 146

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Slow Corporation reported the following data for the year ended December 31, 20X3:  Net sales revenue $400,000 Profit 25,000 Interest expense (net of tax) 3,000 Total assets 200,000 Shareholders’ equity 160,000 Net fixed assets 100,000 Shares of common stock outstanding 15,000 shares  Market value per share $16.00 Compute the following ratios:  (a)  Profit margin  (b)  Return on assets  (c)  Return on equity  (d)  Earnings per share  (e)  Price/earnings ratio  (f)  Debt/equity ratio  (g)  Financial leverage percent  (h)  Fixed asset turnover ratio \begin{array}{l}\begin{array} { | l | r | } \hline \text { Net sales revenue } & \$ 400,000 \\\hline \text { Profit } & 25,000 \\\hline \text { Interest expense (net of tax) } & 3,000 \\\hline \text { Total assets } & 200,000 \\\hline \text { Shareholders' equity } & 160,000 \\\hline \text { Net fixed assets } & 100,000 \\\hline \text { Shares of common stock outstanding } & 15,000 \text { shares } \\\hline \text { Market value per share } & \$ 16.00 \\\hline\end{array}\\\\\text { Compute the following ratios: }\\\begin{array} { | l | l | } \hline \text { (a) } & \text { Profit margin } \\\hline \text { (b) } & \text { Return on assets } \\\hline \text { (c) } & \text { Return on equity } \\\hline \text { (d) } & \text { Earnings per share } \\\hline \text { (e) } & \text { Price/earnings ratio } \\\hline \text { (f) } & \text { Debt/equity ratio } \\\hline \text { (g) } & \text { Financial leverage percent } \\\hline \text { (h) } & \text { Fixed asset turnover ratio } \\\hline\end{array}\end{array}

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(a) $25,000/$400,000 = 6.25%
(b) ($25,0...

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