Answer Market value per share =$75 Common equity= 6,000,000 Number of share outstanding =800,000,000 Market to book ration = $75/(6,000,000/800,000,000) 6,000,000/800,000,000=.75 Market to book ration= 75/.75= 100 3-4 Price/Earnings Ratio A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio? Answer Price /cash flow ratio= price per share/ cash flow per share Price per share = $8 x $3 = $24 P.E = Price per share / EPS P.E = $24 / 1.5 = 16 3-5 ROE Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is ROE Answer ROE= profit margin x asset turnover x equity multiplier =3% asset turnover = sales/asset = 50/100= 2 equity multiplier=2 ROE= 3% x2 x2= 12% 3-6 Du Pont Analysis Donaldson & Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%.
75*800 million= $60 billion Book Value= Assets- Liabilities $10 billion in total assets- $4 billion in current liabilities and long-term debt= $6 billion in common equity Market/Book Ratio= $60 billion/$6 billion= 10 3-4 Price/Earnings Ratio A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio? P/E Ratio= Price per share/Earnings per share $3*$8= $24 The company has an EPS of $1.50 ($24/$1.50)= 16 3-5 ROE Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE?
Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Answer Equity multiplier Asset /equity = 2.5/1 A=L+E 2.5=1.5=+1 Debt/asset = 1.5/2.5 = .6 3-3 Market/Book Ratio Winston Washers’s stock price is $75 per share. Winston has $10 billion in total as- sets.
• $4,072. • $6,100. • $4,100. Multiple Choice Question 198 Given the following account balances at year end, compute the total intangible assets on the balance sheet of Janssen Enterprises. Cash $1,500,000 Accounts Receivable 4,000,000 Trademarks 1,000,000 Goodwill 2,500,000 Research & Development Costs 2,000,000 • $7,500,000.
ACCT 3001 Job Order Costing The December 31, 2009, balance sheet of Danko Corp. is presented below: Danko Corp. Balance sheet December 31, 2009 Cash $12,000 Accounts Payable $5,000 Building & Equip. 20,000 Common Stock 10,000 Accum. Deprec. (4,000) Retained Earnings 13,000 $28,000 $28,000 During 2010, the following events occurred: 1. Danko purchased, on account, raw materials for $1,600, and used $1,300 in production.
|Stock |Value held by fund | |A |$ 7,000,000 | |B |12,000,000 | |C |8,000,000 | |D |15,000,000 | |Total |$42,000,000 | Net asset value = [pic]= $10.49 5. Value of stocks sold and replaced = $15,000,000 Turnover rate = [pic]= 0.357 = 35.7% 6. a. NAV = [pic]= $39.40 b. Premium (or discount) = [pic] = [pic]= –0.086 = -8.6% The fund sells at an 8.6% discount from NAV 7. Rate of return = [pic] = [pic]= 0.0880 = 8.80% 8. a. Start of year price = $12.00 ( 1.02 = $12.24 End of year price = $12.10 ( 0.93 = $11.25 Although NAV increased, the price of the fund fell by $0.99.
4-5 Multiyear Future Value How much would be in your savings account in eight years after depositing $150 today if the bank pays 8 percent per year? (LG4-3) FV8 = 150 × (1 + 0.07)8 150 × 1.71818618 Answer: 257.73 4-7 Compounding with Different Interest Rates A deposit of $350 earns the following interest rates: a. 8 percent in the first year. b. 6 percent in the second year.
During 2007 and 2008 Stator reported Net Income of $25,000 and $15,000 and paid dividends $10,000 and $12,000, respectively. Rotor uses the equity method a. What amount of differential will be amortized annually b. What will be the balance in the investment account on Dec 31, 2007? c. What amount of investment income will be reported by Rotor for the year 2007?
35300+95500+5000+14400= $150,200 B. What are Anderson Company’s total liabilities? 41000+21200= 62,200 C. What is Anderson Company’s total owners’ equity? 150,200-62,200= 88,000 Assests – Liabilities = owners equity D. What is Anderson Company’s debt to equity ratio? Total liabilities divided by owners’ equity = 62,200/88,000= 0.71 to 1 ratio 5.
Income before income taxes was $2,767 million against $2,383 million a year ago. Net income attributable to the company $1,709 million or $3.89 per diluted share against $1,462 million or $3.30 per diluted share a year ago. Costco Wholesale Corporation announced sales results for the five weeks ended September 30, 2012 and seventeen weeks