Question
A firm has sales of $500, total assets of $300, and a debt/equity ratio of 2.00. If its return on equity is 15 percent, what
- A firm has sales of $500, total assets of $300, and a debt/equity ratio of 2.00. If its return on equity is 15 percent, what is its net income?
- You have the following data for a company. What is the return on assets (ROA)? Return on equity = 15%; Earnings before taxes = $50,000; Total asset turnover = 1.2; Profit margin = 7.5%; Tax rate = 35%.
- A company has net income of $218,000, a profit margin of 8.70%, and an accounts receivable balance of $132,850. What is the companys days sales in receivables?
- Pearces has a long-term debt ratio of .45 and a current ratio of 1.25. Current liabilities are $875, sales are $5,780, profit margin is 9.5%, and ROE is 18.5%. What is the amount of net fixed assets?
Forecasted Balance Sheet as of December 31, 2010 |
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Cash | $ 72,000 |
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Accounts receivables | $ 439,000 |
| Accounts and notes payable | $ 432,000 |
Inventories | $ 894,000 |
| Accruals | $ 170,000 |
Total current assets | $1,405,000 |
| Total current liabilities | $ 602,000 |
Land and building | $ 238,000 |
| Long-term debt | $ 404,290 |
Machinery | $ 132,000 |
| Common stock | $ 575,000 |
Other fixed assets | $ 61,000 |
| Retained earnings | $ 254,710 |
Total assets | $1,836,000 |
| Total liabilities and equity | $1,836,000 |
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Forecasted Income Statement for 2010 |
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Sales | $4,290,000 |
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Cost of goods sold | $3,580,000 |
| Per-Share Data |
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Gross operating profit | $ 710,000 |
| EPS | $ 4.71 |
General admin & selling expenses | $ 236,320 |
| DPS | $ 0.95 |
Depreciation | $ 159,000 |
| P/E Ratio | 5.00 |
Misc. | $ 134,000 |
| Market price | $ 23.57 |
Earnings before Taxes | $ 180,680 |
| Number of shares outstanding | 23000 |
Taxes | $ 72,272 |
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Net Income | $ 108,408 |
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Industry Financial Ratios
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| Hopes Financial Ratios
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Ratio/Comment |
Quick Ratio | 1x |
| Quick Ratio |
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Current Ratio | 2.7x |
| Current Ratio |
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Inventory Turnover | 7x |
| Inventory Turnover |
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Days Sales Outstanding | 40 days |
| Days Sales Outstanding |
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Fixed Asset Turnover | 13x |
| Fixed Asset Turnover |
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Total Asset Turnover | 2.6x |
| Total Asset Turnover |
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Return on Assets | 9.10% |
| Return on Assets |
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Return on Equity | 18.20% |
| Return on Equity |
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Debt Ratio | 55% |
| Debt Ratio |
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Profit Margin on Sales | 3.50% |
| Profit Margin on Sales |
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P/E Ratio | 6x |
| P/E Ratio |
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