P2-34 (similar to) Question Help

See Table LOADING... showing financial statement data and stock price data for Mydeco Corp.

a. How did Mydeco's book debt-equity ratio change from 2012 to 2016?

b. How did Mydeco's market debt-equity ratio change from 2012 to 2016?

c. Compute Mydeco's debt-to-enterprise value ratio to assess how the fraction of its business that is debt financed has changed over the period.

a. How did Mydeco's book debt-equity ratio change from 2012 to 2016?

The book debt-equity ratio for 2012 is

nothing. (Round to two decimal places.)

2012-2016 Financial Statement Data and Stock Price Data for Mydeco Corp.
(All data as of fiscal year end; in $ millions)
Income Statement	2012	2013	2014	2015	2016
Revenue	399.2	360.7	422.9	506.9	606.9
Cost of Goods Sold	(187.8)	(172.7)	(204.3)	(247.5)	(295.0)
Gross Profit	211.4	188.0	218.6	259.4	311.9
Sales and Marketing	( 68.5 )	(65.8)	(82.9)	(100.3)	(123.0)
Administration	(60.6)	(60.8)	(59.8)	(66.6)	(78.7)
Depreciation & Amortization	(26.4)	(27.3)	(32.4)	(39.5)	(40.5)
EBIT	55.9	34.1	43.5	53.0	69.7
Interest Income (Expense)	(35.1)	(31.1)	(31.3)	(35.9)	(38.7)
Pretax Income	20.8	3.0	12.2	17.1	31.0
Income Tax	(7.3)	(1.1)	(4.3)	(6.0)	(10.9)
Net Income	13.5	1.9	7.9	11.1	20.1
Shares Outstanding (millions)	53.3	53.3	53.3	53.3	53.3
Earnings per Share	$0.25	$0.04	$0.15	$0.21	$0.38
Balance Sheet	2012	2013	2014	2015	2016
Assets
Cash	47.7	67.7	85.085.0	78.578.5	82.082.0
Accounts Receivable	89.8	70.170.1	71.171.1	75.675.6	86.486.4
Inventory	35.6	31.231.2	27.927.9	30.230.2	34.834.8
Total Current Assets	173.1	169.0	184.0	184.3	203.2
Net Property, Plant & Equipment	243.1	240.8	310.7	341.7	344.5
Goodwill & Intangibles	364.5	364.5	364.5	364.5	364.5
Total Assets	780.7	774.3	859.2	890.5	912.2
Liabilities & Stockholders' Equity
Accounts Payable	19.1	16.5	22.3	27.6	31.8
Accrued Compensation	77.4	6.1	6.9	8.5	9.5
Total Current Liabilities	26.5	22.6	29.2	36.1	41.3
Long-Term Debt	496.3	496.3	570.4	594.7	594.7
Total Liabilities	522.8	518.9	599.6	630.8	636.0
Stockholders' Equity	257.9	255.4	259.6	259.7	276.2
Total Liabilities & Stockholders' Equity	780.7	774.3	859.2	890.5	912.2
Statement of Cash Flows	2012	2013	2014	2015	2016
Net Income	13.5	1.9	7.9	11.1	20.1
Depreciation & Amortization	26.4	27.3	32.44	39.5	40.5
Change in Accounts Receivable	3.9	19.7	negative 1.0	( 4.5 )	( 10.8 )
Change in Inventory	(2.9)	4.4	3.3	( 2.3 )	( 4.6 )
Change in Pay. & Accrued Comp.	1.8	(3.9)	6.6	6.9	5.2
Cash from Operations	42.7	49.4	49.2	50.7	50.4
Capital Expenditures	(23.2)	(23.2)	( 99.8 )	( 75.3 )	( 40.7 )
Cash from Investing Activ.	(23.2)	(23.2)	( 99.8 )	( 75.3 )	( 40.7 )
Dividends Paid	(6.2)	(6.2)	( 6.2 )	( 6.2 )	( 6.2 )
Sale (or Purchase) of Stock	-	-	-	-	-
Debt Issuance (Pay Down)	-	-	74.1	24.3	-
Cash from Financing Activ.	(6.2)	(6.2)	67.9	18.1	( 6.2 )
Change in Cash	13.3	20.0	17.3	( 6.5 )	3.5
Mydeco Stock Price	$7.22	$4.03	$ 5.38	$ 7.82	$ 12.62

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