Please answer the following ratios based off of the FInancial Report of Saxton and Determine a value for the referenced entity using Net Income as a Perpetuity and ROE as the Discount Rate. The ratios to be answered are below:

Asset Utilization Ratios 1. Receivable Turnover = Sales / (A/R)

2. Inventory Turnover = Sales / Inventory

3. Fixed Asset Turnover = Sales / .. Fixed Assets

4. Total Asset Turnover = Sales / .. Total Assets

5. Average Collection Period = A/ R / (Average Credit Sales Per Day) where: Average Credit Sales Per Day = (Sales per Year / 360 Days Per Year) * % of Sales done via credit

SAXTON COMPANY

Income Statement

For the Year Ended December 31, 2009

Sales (all on credit) $ 4,000,000

Cost of Goods Sold3,000,000

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Gross Profit.$ 1,000,000

Selling and Administrative Expenses. 450,000

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Operating Profit $ 550,000

Interest Expense 50,000

Extraordinary Loss. 200,000

Earnings Before Taxes$ 300,000

Income Taxes (33%). 100,000

Net Income.$ 200,000

SAXTON COMPANY

Balance Sheet

As of December 31, 2009

Assets

Cash $ 30,000

Accounts Receivable.. 350,000

Marketable Securities .. 50,000

Inventory. 370,000

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Total Current Assets. $ 800,000

Net Plant and Equipment.. 800,000

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Total Assets.$ 1,600,000

Liabilities and Stockholders Equity

Accounts Payable..$ 50,000

Notes Payable.. 250,000

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Total Current Liabilities..$ 300,000

Long Term Liabilities 300,000

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Total Liabilities ..$ 600,000

Common Stock. 400,000

Retained Earnings.. 600,000

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Total Stockholders Equity.$ 1,000,000

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