1. What is the ROI 2. What is the ROE 3. What is the Gross Margin 4. Other Perti

Question

1. What is the ROI

2. What is the ROE

3. What is the Gross Margin

4. Other Pertinent to industry(inventory turns?)

5. Describe how the firm is performing over last couple of years during this time period.

Case 2-3: The Levi's Personal Pair Proposa PC 2-45 Levi Strauss Financial Performance 1 1994 1993 1992 1991 1990 Income Statement $6,074,321 $3,632,406 $2,441,915 $1,472,786 -$18,410 $19,824 $930,895 $373,402 $557,493 $%236,517 $320,976 $5,892,479 $3,638,152 $2,254,327 $1,394,170 $4,247,150 Cost of Goods Gross Profit Selling G&A; Exp Non Operating Income Interest Exp Income Before Taxes Taxes Net Inc Before Ext Items %5,570,290 $3,431,469 $2,138,821 $1,309,352 $142,045 $53,303 $634,121 $271,673 $362,448 -$1,611 $360,837 $4,902,882 $3,024,330 $1,878,552 $1,147A65 $31,650 $71,384 $691,353 $324,812 $366,541 $9,875 $356,666 $2,651,338 $1,595,812 $37,144 $831,313 $338,902 $492,411 $0 $492,411 $922,785 $36,403 $82,956 $553,668 $288,753 $264,915 -$13,746 $251,169 Net Income 15.4% 58% 36.5% 13.6% Net Income Growth 34.8% Key Financial Ratios Quick Ratio SG&A;/Sales Receivables Turnover Inventories Turnover Total Debt/Equity Net Inc/Sales Net Inc/Total assets 0.87 0.76 23.51 23.4 21.73 24.25 6.68 7.76 2.57 7.31 22.21 6.48 12.53 71.82 7.27 13.54 15.84

Explanation / Answer

2. ROE

Let the equity be x
debt = 2.57 *x   =2.57x
total asset = total Debt + equity
3923912 = 2.57x + x
3923912=3.57x
x= 1099135
debt = 2.57x = 2824777

ROE = NET INCOME/EQUITY DEBT + EQUITY = TOTAL ASSET NET iNCOME/TOTAL ASSET =8.18 320976/TA = 8.18 TA= 320976/0.0818    TA= 3923912

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