Exhibit 9-9 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The Rollerball Corporation's industry averages are as follows: Net Profit Margin = 7.5%; Total Asset Turnover = 2.2; Total Assets/ Equity = 2.0 Rollerball Corporation has the following financial statements for year ending 12/31/2009. (000s omitted) \(\begin{array}{lr} \text { Sales } &5,450 \\ \text { Cost of Goods Sold } &\underline {3,250 }\\ \text { Gross Profit } & 2,200 \\ \text {Depreciation } &820 \\ \text {Operating Expenses } &470 \\ \text { Administration Exp. } &\underline {115 }\\ \text {Operating Profit } & 795 \\ \text { Interest Expense } &\underline {88} \\ \text { Profit Before Taxes } & 707 \\ \text {Taxes } &\underline {247} \\ \text { Net Income } & 460 \\ \text {Dividende } &250 \end{array}\) \(\begin{array}{lrlr} \text { Assets } && {\text { Liabilities }} \\ \hline \text { Cash } & 100 & \text { Notes Payable } & 850 \\ \text { Accounts Receivable } & 1,250 & \text { Accounts Payable } & \underline{1,550} \\ \text { Inventory } & \underline{1,125} & \text { Total Current Liab. } & {2,400}\\ \text { Total Current Assets } & {2,475}&{\text { Long Term Debt }} & 425 \\ \text { Net Fixed Assets } & \underline{1,450} & \text { Common Stock } &400 \\ {\text { Total Assets }} &{3,925} & \text { Retained Earnings } & \underline{700 }\\ &&(\text { Total Liab \& Earnings }&3,925\\ \end{array}\) -Refer to Exhibit 9-9. Calculate the sustainable growth rate for Rollerball Corporation.

A) 19.1% B) 22.7% C) 27.5% D) 52.5% E) 62.5% A) 19.1% B) 22.7% C) 27.5% D) 52.5% E) 62.5%

Exam 9: Company Analysis and Stock Valuation

(Multiple Choice)

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(Multiple Choice)

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