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Quantitative Problem: Rosnan Industries' 2022 and 2021 balance sheets and income statements are shown below.

Balance Sheets
	2022					2021
Assets
Cash and equivalents		$	70				$	55
Accounts receivable			275					300
Inventories			375					350
Total current assets		$	720				$	705
Net plant and equipment			2,000					1,490
Total assets		$	2,720				$	2,195
Liabilities and Equity
Accounts payable		$	150				$	85
Accruals			75					50
Notes payable			120					145
Total current liabilities		$	345				$	280
Long-term debt			450					290
Total liabilities		$	795				$	570
Common stock			1,225					1,225
Retained earnings			700					400
Total common equity		$	1,925				$	1,625
Total liabilities and equity		$	2,720				$	2,195

Income Statements
	2022					2021
Sales		$	2,000				$	1,500
Operating costs excluding depreciation and amortization			1,350					1,050
EBITDA		$	650				$	450
Depreciation and amortization			116					101
EBIT		$	534				$	349
Interest			62					45
EBT		$	472				$	304
Taxes (25%)			118					76
Net income		$	354				$	228

Dividends paid			$54					$48
Addition to retained earnings			$300					$180
Shares outstanding			100					100
Price		$25.00					$22.50
WACC		10.00%

What is the firm's 2022 current ratio? Do not round intermediate calculations. Round your answer to two decimal places.

If the industry average debt-to-assets ratio is 30%, then Rosnan's creditors have a -Select-smallerbiggerCorrect 1 of Item 3 cushion than indicated by the industry average.

What is the firm's 2022 net profit margin? Do not round intermediate calculations. Round your answer to two decimal places.

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If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-assets ratio might be one reason for its high profit margin.

-Select-TrueFalseCorrect 1 of Item 4

What is the firm's 2022 price/earnings ratio? Do not round intermediate calculations. Round your answer to two decimal places.

Using the DuPont equation, what is the firm's 2022 ROE? Do not round intermediate calculations. Round your answer to two decimal places.

%

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