Closets, Closets, Closets Corp. has $1,200,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 9%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $6.45 million, its average tax rate is 25%, and its profit margin is 9.2%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answer to 2 decimal places for the final answers.
Whipporwill Incorporated’s net income for the most recent year was $15,950. The tax rate was 24 percent. The firm paid $3,880 in total interest expense and deducted $5,120 in depreciation expense. What was the company’s cash coverage ratio for the year? Round your answer to 2 decimal places.
Keller Cosmetics maintains an operating profit margin of 8.25% and a sales-to-assets ratio of 3.40. It has assets of $550,000 and equity of $350,000. Assume that interest payments are $35,000 and the tax rate is 40%.
a) What is the return on assets?
b) What is the return on equity?
The average total assets of Party Favors, Inc. amount to $110,000. The firm’s total receivables are $7,000, representing 25 days’ sales. The firm’s profit margin is 8 percent. Use a 365-day year and round your answers to two decimals.
A) What is Party Favor’s asset turnover ratio?
B) What is its ROA?
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