What is the financial leverage multiplier what is the


Income statement                                                           

sales      $ 12, 500, 000

cost of good sold 6,550,000

gross profit          5, 950, 000

operating expenses $ 2,400,000

interest expenses 450,000

taxes   750, 000

net income   $ 2, 350, 000

number of outstanding shares 1,000,000

current market price   $ 37.90

balance sheet

cash   $ 550,000

account receivable 1,450,000

inventory           1,040,000

total current assets   $ 3,040,000

total fixed assets     10, 000, 000

total current liabilities   2,500,000

long term liabilities    6,000,000

paid in capital         2,000,000

retained earnings   2,540,000

based on the following information

What is the net profit margin ?

a.18.80 %

b. 27.20 %

c. 32. 40 %

d. 47. 60 %

2. what is the return on equity ?

a. 17.50 %

b. 51.76 %

c. 92.52 %

d. 117.50 %

3. what is the return on total assets?

A. 32%

b. 15 %

c. 18 %

d. 22%

4. What is the financial leverage multiplier?

a. 2.20

b. 1.87

c. 2.87

d. 3.12

5. calculate the dividends per share if the current dividend payout ratio is 30 %

a. $.705 per share

b. $.735 per share

c. $.854 per share

d. $.623 per share

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the financial leverage multiplier what is the
Reference No:- TGS02721063

Expected delivery within 24 Hours