Financial data for Bridger, Inc., for last year are as follows Bridger, Inc Bala

Question

Financial data for Bridger, Inc., for last year are as follows Bridger, Inc Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Brier Company Land (undeveloped) $ 134,000 $ 140,000 486,000 578,000470,000 864,000 434,000 247,000 344,000 864,000 408,000 251,000 Total assets $2,579,000 $2,641,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity $ 379,000 $ 346,000 1,000,000 1,000,000 1,200,000 1,295,000 Total liabilities and stockholders' equity $2,579,000 $2,641,000 Bridger, Inc Income Statement Sales Operating expenses $ 5,044,000 4,337,840 706,160 Net operating income Interest and taxes $120,000 Interest expense Tax expense 197,000 317,000 Net income $ 389,160 The company paid dividends of $294,160 last year. The "Investment in Brier Company" on the balance sheet represents an investment in the stock of another company.

Explanation / Answer

1)

Margin = Net Operating Income/Sale

Margin = 706160/5044000

Margin = 14%

Tutnover = Net Sale/Average Total Operating Asset

Average Total Asset = (Beginning Total Asset + Ending Total Asset)/2

Average Total Asset = (1920000+1960000)/2

Average Total Asset = $ 1,940,000

Tutnover = 5044000/1940000

Tutnover = 2.60

ROI = Net Operating Income/Average Total Operating Asset

ROI = 706160/1940000

ROI = 36.40%

2)

Residual Income = Net Operating income - Average Total Operating Asset*Minimum Required return

Residual Income = 706160 - 1940000*17%

Residual Income = $ 376,360

Working

  Beginning Ending Balance Balance Assets   Cash 134,000 140,000   Accounts receivable 344,000 486,000   Inventory 578,000 470,000   Plant and equipment, net 864,000 864,000 Operating Asset 1920000 1960000

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.