Last year BearKat Enterprises (BKE) had sales of $315 thousand and a net income
ID: 2815301 • Letter: L
Question
Last year BearKat Enterprises (BKE) had sales of $315 thousand and a net income of $18 thousand, and its year-end total assets were $255 thousand. The firm's debt ratio was 50.9%. Based on the DuPont identity (equation), what was BKE's ROE? Enter your answer as a decimal with four places of precision. Ensure that you precede the decimal point with a number (i.e. 0.1234). Do not round intermediate calculations.
BearKat Enterprises Inc.'s December 31, 2016 balance sheet showed total shareholders equity of $4.01 million and 306 thousand shares of stock outstanding. During 2017, the firm had $451 thousand of net income, and it paid out $104 thousand as dividends. What was the book value per share at 12/31/17, assuming no common stock was either issued or retired during 2017?
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Explanation / Answer
Answer 1) sales $315 in thousand net income $18 in thousand total assets $255 in thousand debt ratio 50.90% As we know total asset is 255 and debt ratio =50.90 which mean equity = (1-.5090) Equity = =255*(1-0.5090) 125.205 in thousand ROE = (Net profit/Sales )*(sales/Total Asset)*(total Asset/Total equity) ROE = =(18/315)*(315/255)*(255/125.205) 0.1438 Answer 2) Book value = Total equity value / Number of share out standing i total shareholders equity 4010000 ii Number of share 306000 iii net income 451000 iv dividend paid 104000 v=iii-iv Amount available after dividend 347000 vi Total share holder equity in 2017 =i+v= 4357000 Vii Book value per share = vi/ii 14.2386
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