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For the most recent fiscal year, the Hammock Company's total equity was $450 and net income was equal to $97. Of the $97 net income, $44 was retained. What is the sustainable growth rate for the Ladder Company?
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- Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the companys financial statements for the 2 most recent years. Required: Note: Round all answers to two decimal places. 1. Compute the following for each year: (a) return on assets, (b) return on stockholders equity, (c) earnings per share, (d) price-earnings ratio, (e) dividend yield, and (f ) dividend payout ratio. 2. CONCEPTUAL CONNECTION Based on the analysis in Requirement 1, would you invest in the common stock of Kepler?Last year, McGinley Company had total equity of $600,000, a return on assets of 10%, and a return on equity of 15%. What was the amount of McGinley's total assets?Okafor Design has equity of $168,500, total assets of $195,000, net income of $63,000, and dividends of $37,800. What is the sustainable growth rate?
- Bulldogs Inc. is funded by both debt and equity and has a total liabilities to total asset ratio of 45%. If the firm has a retained earnings breakpoint of 3,250,000, how much is the additions to the retained earnings during the year?Gilmore, Inc., had equity of $175,000 at the beginning of the year. At the end of the year, the company had total assets of $330,000. During the year, the company sold no new equity. Net income for the year was $37,000 and dividends were $5,000. a. What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the sustainable growth rate if you use the formula ROE × b and beginning of period equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the sustainable growth rate if you use end of period equity in this formula? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet Sales $ 16,400 Current assets $ 11,200 Debt $ 13,600 Costs 11,200 Fixed assets 24,300 Equity 21,900 Taxable income $ 5,200 Total $ 35,500 Total $ 35,500 Taxes (21%) 1,092 Net income $ 4,108 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. What is the sustainable growth rate?
- The most recent financial statements for Bello Co. are shown here: Income Statement Balance Sheet Sales $ 18,900 Current assets $ 11,700 Debt $ 15,700 Costs 12,800 Fixed assets 26,500 Equity 22,500 Taxable income $ 6,100 Total $ 38,200 Total $ 38,200 Taxes (21%) 1,281 Net income $ 4,819 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. What is the sustainable growth rate?The newspaper reported last week that Tisch Enterprises earned $34.07 million this year. The report also stated that the firm’s return on equity is 16 percent. The firm retains 75 percent of its earnings. What will next year's earnings be?For the most recent year, Camargo, Inc., had sales of $534,000, cost of goods sold of $241,680, depreciation expense of $60,400, and additions to retained earnings of $72,800. The firm currently has 20,000 shares of common stock outstanding, and the previous year’s dividends per share were $1.35. Assuming a 22 percent income tax rate, what was the times interest earned ratio?
- Based on the following information, calculate the sustainable growth rate for Kaleb’s Heavy Equipment: Profit margin 7.2% Capital intensity ratio .63 Debt-equity ratio .55 Net income $32,000 Dividends $16,000The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet Sales $ 20,800 Current assets $ 12,080 Debt $ 16,840 Costs 14,320 Fixed assets 34,650 Equity 29,890 Taxable income $ 6,480 Total $ 46,730 Total $ 46,730 Taxes (25%) 1,620 Net income $ 4,860 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 percent dividend payout ratio. What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)The Optical scam company has forecast a sales growth of 20 percent for next year. The current financial statements are shown below: What is pro forma balance sheet for next year? Sales $ 31,600,000 Costs 26,675,500 Taxable income $ 4,924,500 Taxes 1,723,575 Net income $ 3,200,925 Dividends $ 1,280,370 Addition to retained earnings 1,920,555 Balance Sheet Assets Liabilities and Owners' Equity Current assets $ 7,320,000 Accounts payable $ 5,688,000 Long-term debt 6,636,000 Fixed assets 20,172,000 Common stock $ 1,594,000 Accumulated retained earnings 13,574,000 Total equity $ 15,168,000 Total assets $ 27,492,000 Total liabilities and equity
