Question
The balance sheet for gallinas industry is as follows _________________________ __ ASSETS Cash $40,000 Marketable securities $60,000 Accounts receivable $120,000 Inventories $160,000 Total current assets
The balance sheet for gallinas industry is as follows
___________________________ ASSETS
Cash $40,000
Marketable securities $60,000
Accounts receivable $120,000
Inventories $160,000
Total current assets $380,000
Land and building (net) $150,000
Machinery and equipment $250,000
Total fixed assets (net) $400,000
Total assets $780,000
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts Payable $100,000
Notes Payable $30,000
Accrued Wages $30,000
Total current liabilities $160,000
Long term debt $180,000
Proffered stock $80,000
Common stock(10,000 share)$260,000
Retaining earning $100,000
Total Liabilities and stockholder's Equity $780,000
___________________________ Additional information with respect to the firm is available:
(1) Preferred stock can be liquidated at book value.
(2) Accounts receivable and inventories can be liquidated at 90% of book value.
(3) The firm has 10,000 shares of common stock outstanding.
(4) All interest and dividends are currently paid up.
(5) Land and buildings can be liquidated at 130% of book value.
(6) Machinery and equipment can be liquidated at 70% of book value.
(7) Cash and marketable securities can be liquidated at book value.
Given this information, answer the following:
a. What is Gallinas Industries' book value per share?
b. What is its liquidation value per share?
c. Compare, contrast, and discuss the values found in parts a and b.
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
