SITH: Income Statement for Year Ended December 31, 20XX ($ Millions, except for per share data) Sales $3,500 Cost of goods sold 2,000 Selling, general, and administrative 1,000 expenses Earnings before interest and taxes $500 (EBIT) Interest expense 70 Earnings before taxes (EBT) $430 Federal and state income taxes 172 (40%) $258 Net income $35 Common stock price per share Other information Common stock price per share $35 Expected growth rate of earnings 10% What is the firm's fixed asset turnover ratlo? How do you interpret the ratio excluding extreme cases? Use the following data for Super Hot International Technology (NYSE: SITH) to answer the following questions: questions 10-15. Interpret the ratios from the perspective of investors. SITH: Balance Sheet as of December 31, 20XX ($ Millions, except for the number of shares) Cash $100 Accounts payable $85 Account 220 Note payable 125 receivables Inventories 330 Other current 140 liabilities Total current $650 Total current liabilities $350 assets Net fixed assets 1,650 Long-term debt 625 Common stock 525 (50,000,000 shares) Retained earnings 800 Total common equity $1,325 $2,300 Total assets $2,300 Total liabilities and equity * Note payable and long-term debt are interest-bearing debts. SITH: Income Statement for Year Ended December 31, 20XX ($ Millions, except for per share data) $3.500 Expected growth rate of earnings 10% What is the firm's fixed asset turnover ratio? How do you interpret the ratio excluding extreme cases? 1) 2.12; The lower, the better. 2) 2.12; The higher, the better. 3) 21.2; The lower, the better. 4) 21.2; The higher, the better. 5) 212; The lower, the better. Question 11 (2.5 points) What is the firm's earnings per share (EPS)? How do you interpret the ratio? 1) $2.58; The higher the better. 2) $2.58; The lower the better. 5) 212; The lower the better. Question 11 (2.5 points) What is the firm's earnings per share (EPS)? How do you interpret the ratio? 1) $2.58; The higher, the better. 2) $2.58; The lower, the better. 3) $3.90; The higher, the better. 4) $5.16; The lower, the better. 5) $5.16; The higher, the better. Question 12 (2.5 points) What is the firm's price-to-earnings (P/E) ratio? Interpret the ratio from the perspective of a potential investor. R/F is preferred. 5) $5.16; The higher, the better. Question 12 (2.5 points) What is the firm's price-to-earnings (P/E) ratio? Interpret the ratio from the perspective of a potential investor. 1) 15.0; All else equal, higher P/E is preferred. 2) 13.6; All else equal, higher P/E is preferred. 3) 13.6; All else equal, lower P/E is preferred. 4) 6.78; All else equal, higher P/E is preferred. 5) 6.78; All else equal, lower P/E is preferred. Question 13 (2.5 points) What is the film's DEG retia Internet the etio from the perspection amatentiel SAMSUNG 5) 6.78; All else equal, lower P/E is preferred. Question 13 (2.5 points) What is the firm's PEG ratio? Interpret the ratio from the perspective of a potential investor. 1) 13.6; All else equal, the lower, the better. 2) 6.78; All else equal, the lower, the better. 3) 6.78; All else equal, the higher, the better. 4) 0.68; All else equal, the lower the better. 5) 0.68; All else equal, the higher, the better. Question 14.12.5 points) SAMSUNG 5) 0.68; All else equal, the higher, the better. Question 14 (2.5 points) What is the firm's earnings yield ratio? How do you interpret the ratio? 1) 6.78; The higher, the better. 2) 6.78; The lower, the better. 3) 0.15; The higher, the better. 4) 0.15; The lower, the better. 5) Insufficient information is given. Question 15 (2.5 points) What is the firm's price-to-book value (P/B) ratio? Interpret the ratio from the perspective of a potential investor. C 5) Insufficient information is given. Question 15 (2.5 points) What is the firm's price-to-book value (P/B) ratio? Interpret the ratio from the perspective of a potential investor. 1) 1.32; All else equal, the higher, the better. 2) 1.32; All else equal, the lower the better. 3) 0.03; All else equal, the higher, the better. 4) 0.03; All else equal, the lower, the better. 5) 0.30; All else equal, the lower, the better. Page 2 of 9 Previous Page Next Page
