Use the following information to determine how much Xavier Metals is worth at th

Question

Use the following information to determine how much Xavier Metals is worth at the end of 2011. Can you think of any additional information that you would like to know about Xavier Metals to help you answer this question more thoroughly? Explain. (Note: All $ amounts are in millions. Assume there are 10 million shares of common stock outstanding.) 2011 2010 Cash 119 98 Marketable Securities 59 0 Accounts receivable 312 254 Inventory 278 239 Prepaid Expenses 35 21 Fixed Assets 536 409 Accumulated Depreciation (76) (53) Accounts Payable 212 198 Accrued Expenses 98 76 Dividend Payable 40 0 Notes Payable 125 0 Common Stock 600 550 Retained Earnings 188 144

Explanation / Answer

The worth is the balance of sharholder's equity = Common Stock + Retained Earnings 2011 = 600 + 188 = $788m 2010 = 550 + 144 = $694M THE RISE IN RETAINED EARNINGS IS A HEALTHY SIGN

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