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Chapter 3 HW ABC Inc. 2017 sales are $900,000. Operating costs (excluding depreciation) are 80% of sales. Net fixed assets are $125,000. Depreciation amounted to 12% of net fixed assets. Interest expenses are $100,000. The tax rate is 30% and ABC Inc. paid 10% in dividends. Income Statement and other info: Year-end stock price # of shares Lease Payment Sinking Fund Payment ABC Inc. Income Statement Sales Operating costs (excluding depreciation) EDITDA Depreciation EBIT Interest Expense EBT Taxes Net Income Common Dividends Addition to Retained Earnings 2017 $75.00 5000 30000 0 2016 $70.00 3000 30000 0 2017 2016 900,000 850,000 720,000 680,000 180,000 170,000 15,000 12,000 165,000 158,000 100,000 130,000 65,000 28,000 19,500 8,400 45,500 19,600 4,550 40,950 4000 15,600 Balance Sheet Assets Cash and Cash Equivalents Short term Investments Accounts Receivable Inventories Total current assets Net Fixed Assets Total Assets Liabilities and Equity Accounts Payable Accruals Notes Payable Total Current Liabilities Long term debt Total Liabilities Common Stock 2017 2016 40,000 30,000 4,500 8,500 156,000 180,000 80,000 70,000 280,500 288,500 125,000 100,000 405,500 388,500 2017 15,000 18,500 9,000 42,500 123,000 165,500 160,000 2016 12,500 14,000 6,000 32,500 176,950 209,450 140,000 Retained Earnings Total Common Equity Total Liabilities and Equity 80,000 39,050 240,000 179,050 405,500 388,500 1. Find all of the ratios below: 2017 2016 IA Liquidity Ratios Current Ratio Quick Ratio 3.5 2 Asset Management Ratios Inventory Turnover Days Sales Outstanding Fixed Asset Turnover Total Assets Turnover 25.39 55.08 3.5 2.7 Debt Ratios Debt Ratio TIE ratio EBITDA ratio 35% 6.5 3.5 Profitability Ratios Profit Margin Return on Assets Return on Equity 12% 13.5% 15% Market Ratios EPS P/E ratio Cash flow per share BV per share Market to book ratio N/A $14.78 N/A N/A 1.82 2. Write a synopsis on how this company compares with the industry in each section of ratios. 3. Perform a DuPont analysis for ABC Inc. 2017 2016 ROE = PM * 4. Explain the results in part 3. TA Turnover * Equity Multiplier