Question
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.:
WIPER INC. | |||||||||
Condensed Balance Sheets | |||||||||
December 31, 2020, 2019, 2018 | |||||||||
(in millions) | |||||||||
| 2020 | 2019 | 2018 | ||||||
Current assets | $ | 650 |
| $ | 900 |
| $ | 700 |
|
Other assets |
| 2,750 |
|
| 2,050 |
|
| 1,750 |
|
Total assets | $ | 3,400 |
| $ | 2,950 |
| $ | 2,450 |
|
Current liabilities | $ | 500 |
| $ | 800 |
| $ | 700 |
|
Long-term liabilities |
| 1,500 |
|
| 1,000 |
|
| 800 |
|
Stockholders' equity |
| 1,400 |
|
| 1,150 |
|
| 950 |
|
Total liabilities and stockholders' equity | $ | 3,400 |
| $ | 2,950 |
| $ | 2,450 |
|
WIPER INC. | ||||||
Selected Income Statement and Other Data | ||||||
For the year Ended December 31, 2020 and 2019 | ||||||
(in millions) | ||||||
| 2020 | 2019 | ||||
Income statement data: |
|
|
|
|
|
|
Sales | $ | 3,300 |
| $ | 2,900 |
|
Operating income |
| 380 |
|
| 300 |
|
Interest expense |
| 80 |
|
| 70 |
|
Net income |
| 300 |
|
| 230 |
|
Other data: |
|
|
|
|
|
|
Average number of common shares outstanding |
| 44 |
|
| 42 |
|
Total dividends paid | $ | 50 |
| $ | 30 |
|
Required:
- Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
- Calculate return on equity for 2020 and 2019.
- Calculate working capital and the current ratio for each of the past three years.
- Calculate earnings per share for 2020 and 2019.
- If Wiper's stock had a price/earnings ratio of 14 at the end of 2020, what was the market price of the stock?
- Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
- Calculate the dividend payout ratio for 2020.
- Assume that accounts receivable at December 31, 2020, totaled $310 million. Calculate the number of days' sales in receivables at that date.
- Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
- Calculate the times interest earned ratio for 2020 and 2019.
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