MNF Corporation Gathered the Following Data at the End of the Accounting

question 23

Short Answer

MNF Corporation gathered the following data at the end of the accounting period,December 31,2009:
$\begin{array}{lrl}\text { Net income } & \$ 60,000 \\\text { Net sales revenue } & 1,200,000 \\\text { Interest expense } & 25,000 \\\text { Total liabilities } & 200,000 \\\text { Average stockholders' equity }(50,000 \text { shares } & 300,000 \\\text { outstanding) } & \\\text { Dividends declared and paid during } 2009 & 22,500 \\\text { Market price per share of stock at year end } & 9 \\\text { Average income tax rate } &40\% \\\text { Requirements } &\end{array}$ Part 1:
Calculate each of the following ratios:
A.Profit margin
B.Return on equity
C.Earnings per share
D.Dividend yield ratio
E.Price/earnings ratio
F.Return on assets
G.Financial leverage percentage
Part 2:
Interpret the financial leverage percentage.

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Definitions:

Debt Ratio

A metric assessing a firm's leverage, determined by dividing its total liabilities by its total assets.

Lessee

A lessee is an individual or entity that leases an asset from another party, called the lessor, under the terms of a lease agreement.

Tax Effects

Tax effects refer to the impact of tax laws on an individual's or company's financial decisions and operations, affecting net income, investment choices, and cash flows.

After-Tax Cost

The net cost of a financial transaction after factoring in the effects of taxes.