Chapter 3 HW
ABC Inc. 2017 sales are $900,000. Operating costs (excluding depreciation) are 80% of sales. Net fixed assets are $125,000. Depreciation amounted to 12% of net fixed assets. Interest expenses are $100,000. The tax rate is 30% and ABC Inc. paid 10% in dividends.
Income Statement and other info:
20172016
Year-end stock price $75.00$70.00
# of shares 50003000
Lease Payment 3000030000
Sinking Fund Payment 00
ABC Inc. Income Statement
20172016
Sales 900,000850,000
Operating costs (excluding depreciation) 720,000680,000
EDITDA 180,000 170,000
Depreciation 15,000 12,000
EBIT 165,000158,000
Interest Expense 100,000130,000
EBT 65,000 28,000
Taxes 19,500 8,400
Net Income 45,500 19,600
Common Dividends 4,550 4000
Addition to Retained Earnings 40,950 15,600
Balance Sheet
Assets 2017 2016
Cash and Cash Equivalents 40,000 30,000
Short term Investments 4,500 8,500
Accounts Receivable 156,000 180,000
Inventories 80,000 70,000
Total current assets 280,500 288,500
Net Fixed Assets 125,000 100,000
Total Assets 405,500 388,500
Liabilities and Equity 2017 2016
Accounts Payable 15,000 12,500
Accruals 18,500 14,000
Notes Payable 9,000 6,000
Total Current Liabilities 42,500 32,500
Long term debt 123,000 176,950
Total Liabilities 165,500 209,450
Common Stock 160,000 140,000
Retained Earnings 80,000 39,050
Total Common Equity 240,000 179,050
Total Liabilities and Equity 405,500 388,500
- Find all of the ratios below:
20172016IA
Liquidity Ratios
Current Ratio3.5
Quick Ratio2
Asset Management Ratios
Inventory Turnover25.39
Days Sales Outstanding55.08
Fixed Asset Turnover3.5
Total Assets Turnover2.7
Debt Ratios
Debt Ratio35%
TIE ratio6.5
EBITDA ratio3.5
Profitability Ratios
Profit Margin12%
Return on Assets13.5%
Return on Equity15%
Market Ratios
EPSN/A
P/E ratio$14.78
Cash flow per shareN/A
BV per shareN/A
Market to book ratio1.82
- Write a synopsis on how this company compares with the industry in each section of ratios.
- Perform a DuPont analysis for ABC Inc.
ROE = PM*TA Turnover*Equity Multiplier
2017
2016
- Explain the results in part 3.