1. From the information below construct an income statement.Calculate the firm’s earnings per share and dividends per share.What can we learn by reviewing a firm’s income statement?What basic relationship can we see in an income statement? Interest expenseCost of goods soldSelling and marketing expensesAdministrative expensesNumber of shares outstandingSalesCommon stock dividendsIncome taxesDepreciation expense$35,000$150,000$40,000$30,000$20,000$400,000$15,000$40,000$20,000

2 The income statement shows the financial impact of the company's current activities throughout the…

he information below construct an income statement. Calculate the firm’s earnings per share and dividends per share. What can we learn by reviewing a firm’s income statement? What basic relationship can we

he information below construct an income statement. Calculate the firm’s earnings per share and dividends per share. What can we learn by reviewing a firm’s income statement? What basic relationship can we

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 8EP

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Cash Accounts receivable (net) Inventories Plant assets (net) Accounts payable Income taxes payable Bonds payable 10% Preferred stock, $50 par Common stock, $10 par -in capital in excess of par y Retained earnings Net credit sales Cost of goods sold Operating expenses Net income 1,500/7,200 1,300/7,200 2021 2020 $1,500,000 $1,000,000 o 1,500/8,000 1,300/8,000 December 31 " 1,600,000 2,600,000 7,000,000 1,100,000 200,000 1,400,000 2,000,000 2,400,000 1,600,000 4,000,000 12,800,000 8,400,000 2,900,000 1,500,000 67. The return on common stock holders' equity for 2021 is 1,200,000 2,200,000 6,500,000 800,000 100,000 Additional information: Depreciation included in cost of goods sold and operating expenses is $1,220,000. On May 1, 2021, 60,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2021. 1,400,000 2,000,000 1,800,000 1,300,000 3,500,000
+ INCOME STATEMENT sales cost of goods sold gross gofit selling and administrative expenses amortization expenses operating expenses interest expenses earnings before taxes taxes earnings after taxes Brefered stock dividends earning available to common shareholder shares outstanding earnings per share Retained earnings balance, January 1, 20xx Add; earnings available to common $ en shareholders 20xx Deduct: cash dividends declared and paid in 20xx retained earnings balance, December 31, 20xx 4700000 2925000 1775000 630000 290000 855000 52,000 803000 390000 413000 STATEMENT OF RETAINED EARNINGS FO THE YEAR ENDED DECEMBER 31, 2003 50000 363000 226875 1.6 880000 363000 200000 1043000
SalesOperating costs (excluding depreciation and amortization) EBITDADepreciation and amortization Earnings before interest and taxes Interest Earnings before taxesTaxes (40%)Net income available to common stockholders Common dividendsSEBRINGCORPORATION: BALANCESHEETSFORYEARENDINGDECEMBER31 (FIGURES ARE STATED IN MILLIONS) Assets: Cash and marketable securities Accounts receivableInventories Total current assets Gross Fixed Assets Less DepreciationNet plant and equipment Total assets 2005 2004 $3,600.0 $3,000.0 $3,060.0 $2,550.0 $540.0 $450.0 90.0 75.0 $450.0 $375.0 65.0 60.0 $385.0 $315.0 154.0 126.0 $231.0 $189.0 $15.0 $13.0 2005 2004 $ 36.00 $ 30.00 $ 340.00 $ 250.00 $ 457.00 $ 351.00 $ 833.00 $ 631.00 $ 1,065.00 $ 825.00 $ (165.00) $ (75.00) $ 900.00 $ 750.00 $ 1,733.00 $ 1,381.00 $ 324.00 $ 270.00 $ 201.00 $ 155.00 $ 216.00 $ 180.00 $ 741.00 $ 605.00 $ 450.00 $ 450.00 $ 1,191.00 $ 1,055.00 $ 150.00 $ 150.00 $ 392.00 $ 176.00 $ 542.00 $ 326.00 $ 1,733.00 $ 1,381.00…
vas.msst Net sales Operating costs except depreciation Depreciation Earnings before interest and taxes (EBIT) Less interest Earnings before taxes (EBT) Taxes Net income Other data: Shares outstanding (millions) Common dividends (millions of $) Int rate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price $98,000 91.140 1,960 $4,900 960 $3,940 1,576 $2,364 500.00 $827.40 6% 40% $56.74 Refer to Exhibit 4.1. What is the firm's ROA? Do not round your intermediate calculations,
Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses (including interest on bonds) Pretax income Income tax Net income Balance Sheet Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Property and equipment (net) Total assets Accounts payable Income taxes payable Bonds payable (interest rate: 10%) Common stock ($10 par value, 10,000 shares outstanding) Retained earnings Total liabilities and stockholders' equity Year 2 $453,000 250,000 203,000 167,000 36,000 10,800 $ 25,200 $ 6,800 42,000 25,000 200 130,000 $204,000 $ 17,000 1,000 70,000 100,000 16,000 $204,000 Year 1 $447,000 241,000 206,000 168,000 38,000 11,400 $ 26,600 $ 3,900 29,000 18,000 100 120,000 $171,000 $ 18,000 1,000 50,000 100,000 2,000 $171,000 Required: Interpret each element of the ratio analysis separately. Ensure accuracy by analyzing each ratio individually!
Accounts payable 1200000 790000 Income taxes payable 220000 100000 Bonds payable 1350000 1350000 10% Preferred stock, $50 par 2000000 2000000 Common stock, $10 par 2350000 1750000 Paid-in capital in excess of par 1600000 1400000 Retained earnings 5030000 3605000 Net credit sales 12850000 Cost of goods sold 8450000 Operating expenses 2700000 Net income 1700000 Additional information: Depreciation included in cost of goods sold and operating expenses is $1240000. On May 1, 20 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared dur The book value per share of common stock at 12/31/26 is computed as follows: $8780000 $235000. $8980000 $213000. $8780000 $213000. $8745000 $235000.
Particulars % weight Capital raised No. of shares/Bonds issued Dividend/ Interest in 1st year Effective cost after tax savings Common stock 40% 2,00,000 20,000 30,000 30,000 Debt 40% 2,00,000 200 12,000 8,400 Preferred stock 20% 1,00,000 10,000 20,000 20,000 5,00,000 62,000 58,400 Capital raised accordingly for the company would be $ 62,000. The retained earnings of the company is $ 2,50,000 which is sufficient to cover the cost. The tax effective cost of capital will be $ 58,400 using taxes at @30% Determine the company WACC.
Liabilities and Equity Current liabilities: Accrued wages and taxes Accounts payable Notes payable Total P 15 P 17 50 45 110 45 118 Long-term debt: Stockholders' equity: Preferred stock (5 million shares) Common stock and paid-in surplus (20 million shares) Retained earnings Total al liabilities and equity 190 195 40 155 200 40 192 237 P550 P500
Lydex Company Comparative Balance Sheet Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: $ 1,260,000 This Year Last Year $960,000 0 2,700,000 3,900,000 240,000 7,800,000 9,300,000 $ 17,100,000 300,000 1,800,000 2,400,000 180,000 5,940,000 8,940,000 $ 14,880,000 $ 3,900,000 3,600,000 7,500,000 7,800,000 1,800,000 9,600,000 $ 2,760,000 3,000,000 5,760,000 7,800,000 1,320,000 9,120,000 Common stock, $ 78 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company $ 17,100,000 $ 14,880,000 Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes…
Income Statement Sales CGS Depr EBIT Interest EBT Taxes Net Income Div Add to RE Balance Sheet Cash AR Inven Current Assets Net Fixed Assets Total Assets AP NP Accrued Wages Current Liab LTD Common Stock Retained Earnings Total Common Eq T. Liab & Equity Year 0 $8,000 1.25 5,000 1.25 600 1.25 $2,400 200 $2,200 550 Use 25% $1,650 $1,200 $ 450 AFN $400 1.25 600 1.25 500 1.25 $1,500 2.500 1.25 $4,000 $ 100 200 100 $ 400 800 1,500 70 1.300 $2,800 $4,000 1" Pass Forecast Year 10,000 200 500 750 625 1875 3,125 5,000 200 2nd Pass Forecast Year 10,000 500 750 625 1875 3,125 5,000 200 1. Calculate the proforma income statement and balance sheet assuming 25% growth (use the constant growth method and assume the company is at full capacity). Assume additional funds needed will come from 60% LTD and 40% from a common stock issue. Interest on the debt is 9% and the common stock will sell for $30 per share and pay $1.00 per share in dividends. (Use balance sheet and income statement on page 1)
Assets Cash and short-term investments Accounts receivable (net) Inventory Property, plant and equipment Total Assets S 40,000 30,000 25,000 215,000 $310.000 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Stockholders equity-common Total Liabilities and Stockholders' Equity $ 60,000 75,000 175,000 $310.000 Income Statement Sales Cost of goods sold Gross profit Operating expenses Net income $ 90,000 45.000 45,000 25.000 20.000 Number of shares of common stock Market price of common stock Dividends per share 5,000 $22 1.00 The following information pertains to Eura Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. What is the price-earnings ratio for Eura?
Accounts Payable Notes Payable Long Term Debt Common Stock Retained Earnings Total Liabilities & Equity $ 275,000 $ 315,000 $ 495,000 $ 925,000 $2,450,000 $4,460,000 Pre-Tax Cost of Debt: Intermediate Debt: 4.5% Long Term Debt: 6.5% Tax Rate: 21% Return on Equity: 11% Dividends per share: $0.20 Earnings per share: $0.90 C/S market price: $55 C/S outstanding: 80000 shares This company uses intermediate debt, long-term debt and common equity to finance its operations. With the information presented above: a. Calculate the firm's debt ratio (book value and market value based) b. Calculate the firm's WACC c. Calculate the new firm's WACC if the firm issued 150,000 new common stock at a flotation cost of $1.20 per share. The new issuance generates $4.5 million.