E4-29 MACYS A) I.

ROE= NET INCOME / AVERAGE STOCKHOLDERS EQUITY

AVERAGE STOCKHOLDERS EQUITY= (5530+4653)/2 =$5091.5 ROE= 847/5,091.5 = 16.63% II. RNOA=NOPAT/AVG NOA

AVG NOA= (11491+11665)/2=$11,578 RNOA= 1,209/11,578=10.44% B) RNOA= NOPAT/ AVG NOA= NOPAT/ SALES x SALES/AVG NOA NOPM= NOPAT/ SALES NOPM = 1,209/25,003 = 4.84% NOAT= SALES/ AVG NOA NOAT= 25,003/[(11491+11665)/2] = 2.16

C) RNOA/ROE = 10.44%/16.63% = 62.78% ROE= RNOA + Nonoperating returns 16.63%=10.44% + Nonoperating returns Nonoperating returns = 6.19 E4-31 COMCAST A) CCURRENT RATIO= CURRENT ASSET/ CURRENT LIABLITIES For the year 2010= 8,886/8,234=1.08 For the year 2009= 3,223/7,249=0.45 If a current ratio is greater than 1.0 which means a positive working capital and vice versa. . Apart from the current ratio the quick ratio can be used for the liquidity test. The quick ratio reflects on a companys liability to meet its current liabilities without liquidating inventories. TIMES INT. EARNED= EARNINGS BEFORE

B)

I.

INT. AND TAXES/ INT. EXPENSES 2009= 5,106/2,044 = 2.498 2010= 6,104/1,735= 3.518 Times interest earned had increased over the past 2 years. Therefore, higher profits. Thus an increasing ratio is a good sign for Comcast. II. LIABILITIES TO EQUITY RATIO= TOTAL LIABILITIES/ STOCKHOLDERS EQUITY

2009= 7,249+42,811/42,811= 1.16932 2010= 6,234+44,434/44,434= 1.140 Decreasing over past 2 year and lower ratio indicates higher solvencies and less risk. Therefore , higher solvency. C) The current ratio indicates positive working capital. Low liquidity.Because if the current is more than 1.0 its significantly liquid. Comcast is profit. Decreasing ratio for liabilities over equity and upward interest rate shows that the company probably has a high profitability and it may pay for its liabilities thus the company has high solvency and less risky investment.