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Foundations Of Financial Management
Found in: Page 80
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Assume the following data for Cable Corporation and Multi-Media Inc.

Capable corporation

Muli-media inc

Net income

$31,200

$140,000

Sales

317,000

2,700,000

Total assets

402,000

965,000

Total debts

163,000

542,000

Stockholder’s equity

239,000

423,000

b. Compute the following additional ratios for both firms:

Net income/Sales

Net income/Total assets

Sales/Total assets

Debt/Total assets

Capable corporation

Multi medi Inc.

Net income/sales

9.84%

5.19%

Net income/Total assets

7.76%

14.51%

Sales/Total assets

78.86%

279.79%

Debt/Total assets

40.55%

56.17%

See the step by step solution

Step by Step Solution

Net income/sales ratio of capable corporation

Net income/sales ratio of Multimedia inc.

Net income/Total assets ratio of capable corporation

Net income/Total assets ratio of Multimedia inc. 

Sales/Total assets ratio of capable corporation

Sales/Total assets ratio of Multimedia inc. 

Debt/Total assets ratio of capable corporation

Debts/Total assets ratio of Multimedia inc. 

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