Baxter Inc. is in a fast growing industry, but doesn't seem to be able to match its competitors' growth rates. Selected financial information for Baxter is as follows ($000):
$\begin{array}{ll}
\text { Sales } & \$ 20,000 \
\text { Net income } & \$ 1,000 \
\text { Total Assets } & \$ 10,000 \
\text { Equity } & \$ 8,000 \
\text { Anmual dividend } & \$ 700
\end{array}$ Research has revealed that the average firm in Baxter's industry pays out 10% of its earnings in dividends, earns 4 cents after tax on every sales dollar, has an equity multiplier of 3.0 and a total asset turnover of 1.9.

($000)

Question

Baxter Inc. is in a fast growing industry, but doesn't seem to be able to match its competitors' growth rates. Selected financial information for Baxter is as follows ($000):
 $\begin{array}{ll}
\text { Sales } & \$ 20,000 \
\text { Net income } & \$ 1,000 \
\text { Total Assets } & \$ 10,000 \
\text { Equity } & \$ 8,000 \
\text { Anmual dividend } & \$ 700
\end{array}$ Research has revealed that the average firm in Baxter's industry pays out 10% of its earnings in dividends, earns 4 cents after tax on every sales dollar, has an equity multiplier of 3.0 and a total asset turnover of 1.9.

($000)

Quizplus · Accepted Answer

The Answer of Baxter Inc. is in a fast growing industry, but doesn't seem to be able to match its competitors' growth rates. Selected financial information for Baxter is as follows ($000):
 $\begin{array}{ll}
\text { Sales } & \$ 20,000 \
\text { Net income } & \$ 1,000 \
\text { Total Assets } & \$ 10,000 \
\text { Equity } & \$ 8,000 \
\text { Anmual dividend } & \$ 700
\end{array}$ Research has revealed that the average firm in Baxter's industry pays out 10% of its earnings in dividends, earns 4 cents after tax on every sales dollar, has an equity multiplier of 3.0 and a total asset turnover of 1.9.

($000)

Baxter Inc Research Has Revealed That the Average Firm in Baxter's Industry