6. The following tables show financial statements of ABC Corp. Year 2008 invento
ID: 2567088 • Letter: 6
Question
6. The following tables show financial statements of ABC Corp. Year 2008 inventories were 396,400. All amounts are in thousands.
a) Compute ABC’s Debt Ratio
b) Compute ABC’s Current Ratio
c) Compute ABC’s Inventory-turnover ratio
d) Compute ABC’s Profit Margin on Sales
e) Compute ABC’s Price/earnings ratio
f) Compute ABC’s Book Value Per Share
Balance Sheet BILITIES ANDSHAREHOLDER'S EQUITY urrent Liabilities 2009 ts Payable 448,3392 2710 Current Portion of L.T. Debt Other Accrued Expenses 34 47443 95,931 1,667,0121203 Total Current Liabilities urrent Assets Cash & Cash Equivalents Short-Term Investments Receivables (net Inventories Other Current Assets Deferred Income Tax Term Debt Liabilities 835 2269,84 187,25 682 L.T. Liability Charges Total Liabilities referred Stock 1838 Common Shareholder's Equi Common Stock (Note #1 208 2,1698 l Current Assets 4,841,586 Ca us 80,33 1,334 Retained Earni ,545,710 1653 1375 1,066,527 720,6 Less: Treasury Stock/Other ible Assets Assets StockholderEquity 457 30.283 5,874,128 3,933, Long-Term Asset Charges tal Common Shareholder's Equi TOTAL LIABILITIES &EQUITY; TAL ASSET Note #1: Shares Outstanding 574.1 572,8 Income Statement SANDS 2009 2008 Total Revenue Cost of Revenue 11,065,186 6,009,395 5,967,888 2,928,814 5,097,2983.080,581 ross Margin Operating Expenses Selling, General & ministrative Research & Development Other 1,495,697 684,702 194,803 2,722,096 881,482 359,828 108,112 731,159 rating Expenses erating Income Interest Expense expenses) revenues 78,267 79,361 et Income Before Taxes 2,800,363 907,747 1,892,616 1,810,520 516,653 Tax Provision (Benefit NET INCOME EARNINGS PER COMMON SH PRICE PER SHARE (YR. END 293,867 $3.30 1.50 $2.26 103.80Explanation / Answer
a. Debt ratio for 2009 = Total liabilities / Total assets
= 2,227,244 / 8,101,372 = 0.27
b. Current ratio for 2009 = Current assets / Current liabilities
= 4,841,586 / 2,115,351 = 2,29
c. Average inventory = (2008 Inventory + 2009 Inventory) / 2
= (396,400 + 682,400) / 2 = 539,400
Inventory turnover ratio = Cost of goods sold / Average inventory
= 5,967,888 / 539,400 = 11.06
d. Profit marin on sales = Net income / Sales
2009 = 1,892,616 / 11,065,186 = 0.17
2008 = 1,293,867 / 6,009,395 = 0,22
e. Price earnings ratio = Market price per share / Earnings per share
2009 = 41.5 / 3.3 = 12.58
2008 = 103.8 / 2.26 = 45.93
f. Book value per share = Common shareholders equity / No of shares
2009 = 5,874,128 / 574,160 = 10.23
2008 = 3,933,566 / 572,830 = 6.87.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.