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Due tonight, any help please (: On a whim, you buy a scratch-off lottery ticket and win $10,000. You decide that the prudent action would
Due tonight, any help please (:
On a whim, you buy a scratch-off lottery ticket and win $10,000. You decide that the prudent action would be to invest this money by purchasing shares in a publicly-traded company. Your friend, Natalie, recommended that you should look at Accuride because she believes that its stock is a safe investment with significant growth potential. You decide to pull the following, abbreviated financials and information related to Accuride from the internet:
ACCURIDE CORPORATION Comparative Balance Sheet ACCURIDE CORPORATION Income Statement Additional information: 1. Cash dividends of $9,000 were declared and paid in 2021. 2. Weighted-average number of shares of common stock outstanding during 2021 was 30,000 shares. 3. Market value of common stock on December 31, 2021, was $21 per share. 4. Industry averages: - Current ratio - 4:1 - Return on common stockholder's equity - 16.4% - Price-earnings ratio 18.4 times - Earnings per share $1.35 Average Collection Period - 31.2 days - Average days in inventory 27.1 days - Quick ratio 2:1 - Times interest earned 6.0 times - Profit margin 10.2% Return on assets 7.9% - Debt ratio 52% - Equity ratio 48% - Debt-to-equity ratio 1.08 Required Analyze the financial statements and make a determination about whether you would purchase shares of Accuride? Be sure to provide justification for your decision. ACCURIDE CORPORATION Comparative Balance Sheet ACCURIDE CORPORATION Income Statement Additional information: 1. Cash dividends of $9,000 were declared and paid in 2021. 2. Weighted-average number of shares of common stock outstanding during 2021 was 30,000 shares. 3. Market value of common stock on December 31, 2021, was $21 per share. 4. Industry averages: - Current ratio - 4:1 - Return on common stockholder's equity - 16.4% - Price-earnings ratio 18.4 times - Earnings per share $1.35 Average Collection Period - 31.2 days - Average days in inventory 27.1 days - Quick ratio 2:1 - Times interest earned 6.0 times - Profit margin 10.2% Return on assets 7.9% - Debt ratio 52% - Equity ratio 48% - Debt-to-equity ratio 1.08 Required Analyze the financial statements and make a determination about whether you would purchase shares of Accuride? Be sure to provide justification for your decisionStep by Step Solution
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