Texts: 4-4. MARKET/BOOK AND EV/EBITDA RATIOS Edelman Engines has $17 billion in total assets - of which cash and equivalents total $100 million. Its balance sheet shows $1.7 billion in current liabilities - of which the notes payable balance totals $1 billion. The firm also has $10.2 billion in long-term debt and $5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $20 per share. The firm's EBITDA totals $1.368 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios?
4-5. PRICE/EARNINGS RATIO A company has an EPS of $2.40, a book value per share of $21.84, and a market/book ratio of 2.7x. What is its P/E ratio?
4-6. DuPONT AND ROE A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million, and it has total assets of $60 million. What is its ROE?
4-7. ROE AND ROIC Baker Industries' net income is $24,000, its interest expense is $5,000, and its tax rate is 25%. Its notes payable equals $27,000, long-term debt equals $75,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC?
4-8. DuPONT AND NET INCOME Precious Metal Mining has $17 million in sales, its ROE is 17%, and its total assets turnover is 3.2x. Common equity on the firm's balance sheet is 50% of its total assets. What is its net income?
