Nova Incorporated declared and paid $4,800 of cash dividends during the current year ended December 31 Its financial statements also reported the following summarized data Current Previous Income Statement Sales revenue $ 270,000 $ 237,000 Cost of goods sold 146,000 136,000 Gross profit 124,000 101,000 Operating expenses 71,300 64,800 Interest expense 4,500 4,400 Income before income taxes 48,200 31,800 Income tax expense 14,460 4,800 Net income $ 33,740 $ 27,000 Balance Sheet Cash $ 8,940 $ 9,800 Accounts receivable (net) 37,000 32,000 Inventory 58,000 53,000 Property and equipment (net) 63,000 56,000 Total assets $ 166,940 $ 150,800 Current liabilities $ 17,000 $ 31,600 Notes payable (long term) 63,000 63,000 Common stock (par $5) 40,800 40 Required Compute the gross profit percentage for the current and previous years Are the current year results better, or worse, than those for the previous year Compute the net profit margin for the current and previous years Are the current year results better, or worse, than those for the previous year Compute the earnings per share for the current and previous years Are the current year results better, or worse, than those for the previous year TIP To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding Common Stock equals the par value per share times the number of shares Stockholders equity totaled $40,800 at the beginning of the previous year Compute the return on equity (ROE) ratios for the current and previous years Are the current year results better, or worse, than those for the previous year Net property and equipment totaled $44,000 at the beginning of the previous year Compute the fixed asset turnover ratios for the current and previous years Are the current year results better, or worse, than those for the previous year Compute the debt to assets ratios for the current and previous years Is debt providing financing for a larger or smaller proportion of the companys asset growth Compute the times interest earned ratios for the current and previous years Are the current year results better, or worse, than those for the previous year After Nova released its current years financial statements, the companys stock was trading at $48 After the release of its previous years financial statements, the companys stock price was $36 per share Compute the P E ratios for both years Does it appear that investors have become more (or less) optimistic about Novas future success

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Posted on Sep 15, 2024

Nova Incorporated declared and paid $4,800 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data:

Nova Incorporated declared and paid $4,800 of cash dividends during the current year ended December 31.

Its financial statements also reported the following summarized data: Current Previous Income Statement Sales revenue $ 270,000 $ 237,000 Cost of goods sold 146,000 136,000 Gross profit 124,000 101,000 Operating expenses 71,300 64,800 Interest expense 4,500 4,400 Income before income taxes 48,200 31,800 Income tax expense 14,460 4,800 Net income $ 33,740 $ 27,000 Balance Sheet Cash $ 8,940 $ 9,800 Accounts receivable (net) 37,000 32,000 Inventory 58,000 53,000 Property and equipment (net) 63,000 56,000 Total assets $ 166,940 $ 150,800 Current liabilities $ 17,000 $ 31,600 Notes payable (long-term) 63,000 63,000 Common stock (par $5) 40,800 40

Required:

Compute the gross profit percentage for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares.
Stockholders equity totaled $40,800 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
Net property and equipment totaled $44,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the companys asset growth?
Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
After Nova released its current years financial statements, the companys stock was trading at $48. After the release of its previous years financial statements, the companys stock price was $36 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Novas future success?