Entity’s operational efficiency for all financial stakeholders

Measure an entity’s operational efficiency for all financial stakeholders

Question 1:

Which is a better ratio to measure an entity’s operational efficiency for all financial stakeholders (lenders and owners)? i) EBIT/Assets(bop). ii) NI/Assets(bop)?

a. i)
b. ii)

For Questions 2 and 3, consider these financial statements for SmallCo:

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Question 2:

What is SmallCo’s annualized Q2 ROE?

Question 3:

What is the company’s TTM ROA?

A. 0.34

B. Not enough info is provided to answer this question.

C.0.63

D. 0.35

Consider these financial statements for another company, coincidentally also called SmallCo:

i will post named Q4

Question4:

Did this Smallco’s Profit Margin improve from 20X0 to 20X1?
Answer Yes or No and provide one reason.
A. The ratio decreased
B. No
C. The ratio increased
D. Yes

Question5:

What was the company’s asset efficiency ratio in 20X1?

Answer all the following questions to find missing numbers 1 through 6.

Use the given units to answer all questions. IE: if you were asked for the “Resulting EBIT” of the No Debt option, your answer would be 250.000.

I will post picture named Q6

Question6:

What is the marketing campaign cost for the Loan Option? (This is missing item 1). This is a negative number. IE: -52.500, not 52.500

Question7:

What is the interest expense for the Loan Option? (This is missing item 2). This is a negative number. IE: -52.500, not 52.500

Question8:

What is the tax expense for the loan option? This is a negative number. IE: -52.500, not 52.500

Question9:

Is the net income for the loan option 49.4 +/- 0.5 ?
A. No
B. Yes
C. Not enough information is provided to answer this question.

Question10:

What is the Debt to Total Project Capital ratio for the Loan Option? Do not use %. IE: write 0.251 instead of 25.1%. Round your answer to two decimal places.

Question11:

Is the ROE higher for the Loan Option than for the No-Loan Option?
A. Not enough information is provided to answer this question.
B. Yes.
C. No.
D. They are roughly equal

Question12:

Which strategy is riskier for Superstuff?
A. Market to X and Y
B. Market to X only
C. Not enough information is provided to answer this question.
D. They are equally risky.

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