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Please provide step by steps process Answer the following questions. a. A firm's stock sells for $100 a share. What will be the price after
Please provide step by steps process
Answer the following questions. a. A firm's stock sells for $100 a share. What will be the price after a (1) two-for-one split (2) four-for-one split (3) one-for-two reverse split? b. A firm's balance sheet has the following entries: Cash Total assets Common stock (10,000,000 shares outstanding, $2 par) Additional paid-in capital Retained earnings $ 30,000,000 100,000,000 20,000,000 5,000,000 35,000,000 What will be each of these balance sheet entries after a $2 a share cash dividend (2) four-for-one split (3) 5 percent stock dividend (current price of the stock is $20)? c. Using the income statement and balance sheet constructed in (a) and (b), compute the following ratios. Compare the results with the industry averages. What strengths and weaknesses are apparent? INDUSTRY AVERAGE 2:1 1:1 2.5 1.2. RATIO Current ratio Acid test (quick ratio) Inventory turnover a. annual sales b. cost of goods sold Receivables turnover a. annual credit sales b annual sales Average collection period Operating profit margin Net profit margin Return on assets Return on equity Debt/equity Debt ratio (debt/total assets) Times-interest-earned ADDITIONAL INFORMATION: last year's inventory credit sales 5.Ox 6.Ox 2.5months 26% 19% 10% 15% 33% 25% 7.1x $40,000 $90,000 Answer the following questions. a. A firm's stock sells for $100 a share. What will be the price after a (1) two-for-one split (2) four-for-one split (3) one-for-two reverse split? b. A firm's balance sheet has the following entries: Cash Total assets Common stock (10,000,000 shares outstanding, $2 par) Additional paid-in capital Retained earnings $ 30,000,000 100,000,000 20,000,000 5,000,000 35,000,000 What will be each of these balance sheet entries after a $2 a share cash dividend (2) four-for-one split (3) 5 percent stock dividend (current price of the stock is $20)? c. Using the income statement and balance sheet constructed in (a) and (b), compute the following ratios. Compare the results with the industry averages. What strengths and weaknesses are apparent? INDUSTRY AVERAGE 2:1 1:1 2.5 1.2. RATIO Current ratio Acid test (quick ratio) Inventory turnover a. annual sales b. cost of goods sold Receivables turnover a. annual credit sales b annual sales Average collection period Operating profit margin Net profit margin Return on assets Return on equity Debt/equity Debt ratio (debt/total assets) Times-interest-earned ADDITIONAL INFORMATION: last year's inventory credit sales 5.Ox 6.Ox 2.5months 26% 19% 10% 15% 33% 25% 7.1x $40,000 $90,000Step by Step Solution
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