BOD CORPORATION Balance Sheets as of December 31, 2014 and 2015 (5 in millions) 2014 2015 2015 Assets Current Assets Cash Accounts Receivable Inventory Total Fixed Assets Net Fixed Assets $ 190 700 480 $ 1,370 2014 Liabilities and Owners' Equity Current Liabilities Accounts Payable $ 310 Notes Payable 200 Total $ 510 $ 260 800 550 $ 1.610 350 225 575 $ $ 1,670 $ 2.130 $ 450 $ 500 Long Term Debt Owners' Equity Common stock plus paid-in surplus Retained Earnings Total 700 1,380 $ 2,080 800 1.865 $ 2,665 Total Assets $ 3.040 $ 3.740 Total liabilities and owners' equity 3,040 $ 3.740 BOD CORPORATION 2015 Income Statement ($ in Millions) Net Sales Cost of Goods Sold Depreciation EBIT Interest Paid Taxable income Taxes Net Income $ 2,560 1,251 98 $ 1,211 56 $ 1.155 347 $ 808 Dividends Addition to Retained Earnings 323 485 1) Using the financial statements for BOD Corp. Calculate the following ratios for 2015: a) Current Ratio b) Debt-Equity Ratio c) Days Sales in Inventory d) Return on Equity e) Using the tables below and the ratios above only, give a brief summary of BOD Corps, financial position. Ratio Current Debt/Equity ROE Top Quartile 2.1 1.3 0.54 Median 1.3 1.1 0.25 Bottom Quartile 0.8 0.6 0.11 2) The Pear Co. had sales of $105,500, a profit margin of 4 percent, and dividends of $2,000. What is the plowback/retention ratio? 3) A firm has a total debt ratio of 0.55, total debt of $330,000 and net income of $40,500. What is the company's return on equity (ROE)? 4) Blues Inc., has sales of $10,120, total assets of $3,780, and a debt-equity ratio of 0.30. If its return on equity is 15%, what is its net income? (Hint - Use the Du Pont Identity)