1. Provide the formulas and calculate the financial ratios for this company in 1998. Expected 5 years earnings growth is 7%. (20 marks) Assets Current Assets Cash Balance Sheet ($ in Millions) 1998 Liabilities and Owners' Equity 1998 Current Liabilities Accounts Payable 500 500 Accounts Receivable 200 Notes Payable 700 Inventory 1000 Total Current Liabilities 1200 Total Current Assets 1700 Long-Term Liabilities Long-Term Debt 900 Fixed Assets Total Long-Term Liabilities 900 Owners' Equity Property, Plant, and Equipment 1600 Less Accumulated Depreciation 300 Net Fixed Assests 1300 500 300 Common Stock ($1 Par) Capital Surplus Retained Earnings Total Owners' Equity Total Liab. and Owners' Equity 100 900 Total Assets 3000 3000 Income Statement ($ in Millions) 1998 Sales 3800 Cost of Goods Sold 2200 Administrative Expenses 400 Depreciation Earnings Before Interest and Taxes Interest Expense Taxable Income Taxes Net Income Dividends Addition to retained Earnings Other Information Number of Shares Outstanding (Milions) 500 Price per Share 7.06 Ratios Formula Answer Liquidity ratios Current ratio Quick ratio Net Working Capital Activity ratios receivable Accounts receivable turnover ratio Inventory turnover Total asset turnover Leverage ratios Debt-equity ratio Equity multiplier Times interest earned Profitability ratios Net profit margin Return on assets Return on equity Common-stock ratios Price to Earnings ratio (P/E ratio) Earnings per share (EPS) PEG ratio Dividends per share (DPS) Dividend payout ratio Dividend yield Book value per share Price-to-book-value FNCE 2280 - Fall 2019-Assignment 2 Page 3 of 6