Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 2019 2018 Current assets $ 685 $ 917 $ 773 Other assets 2,417 1,924 1,723 Total assets $ 3,102 $ 2,841 $ 2,496 Current liabilities $ 581 $ 816 $ 714 Long-term liabilities 1,510 995 860 Stockholders’ equity 1,011 1,030 922 Total liabilities and stockholders' equity $ 3,102 $ 2,841 $ 2,496 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: Sales $ 3,054 $ 2,917 Operating income 300 314 Interest expense 88 69 Net income 203 198 Other data: Average number of common shares outstanding 41.7 47.1 Total dividends paid $ 54.0 $ 52.7 Required: Calculate return on investment, based on net income and average total assets, for 2020 and 2019. Calculate return on equity for 2020 and 2019. Calculate working capital and the current ratio for each of the past three years. Calculate earnings per share for 2020 and 2019. If Wiper's stock had a price/earnings ratio of 11 at the end of 2020, what was the market price of the stock? Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. Calculate the dividend payout ratio for 2020. Assume that accounts receivable at December 31, 2020, totaled $313 million. Calculate the number of days' sales in receivables at that date. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. Calculate the times interest earned ratio for 2020 and 2019.
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 2019 2018 Current assets $ 685 $ 917 $ 773 Other assets 2,417 1,924 1,723 Total assets $ 3,102 $ 2,841 $ 2,496 Current liabilities $ 581 $ 816 $ 714 Long-term liabilities 1,510 995 860 Stockholders’ equity 1,011 1,030 922 Total liabilities and stockholders' equity $ 3,102 $ 2,841 $ 2,496 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: Sales $ 3,054 $ 2,917 Operating income 300 314 Interest expense 88 69 Net income 203 198 Other data: Average number of common shares outstanding 41.7 47.1 Total dividends paid $ 54.0 $ 52.7 Required: Calculate return on investment, based on net income and average total assets, for 2020 and 2019. Calculate return on equity for 2020 and 2019. Calculate working capital and the current ratio for each of the past three years. Calculate earnings per share for 2020 and 2019. If Wiper's stock had a price/earnings ratio of 11 at the end of 2020, what was the market price of the stock? Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. Calculate the dividend payout ratio for 2020. Assume that accounts receivable at December 31, 2020, totaled $313 million. Calculate the number of days' sales in receivables at that date. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. Calculate the times interest earned ratio for 2020 and 2019.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.4C
Related questions
Question
Practice Pack
Presented here are summarized data from the balance sheets and income statements of Wiper Inc.:
WIPER INC. | |||||||||
Condensed Balance Sheets | |||||||||
December 31, 2020, 2019, 2018 | |||||||||
(in millions) | |||||||||
2020 | 2019 | 2018 | |||||||
Current assets | $ | 685 | $ | 917 | $ | 773 | |||
Other assets | 2,417 | 1,924 | 1,723 | ||||||
Total assets | $ | 3,102 | $ | 2,841 | $ | 2,496 | |||
Current liabilities | $ | 581 | $ | 816 | $ | 714 | |||
Long-term liabilities | 1,510 | 995 | 860 | ||||||
1,011 | 1,030 | 922 | |||||||
Total liabilities and stockholders' equity | $ | 3,102 | $ | 2,841 | $ | 2,496 | |||
WIPER INC. | ||||||
Selected Income Statement and Other Data | ||||||
For the year Ended December 31, 2020 and 2019 | ||||||
(in millions) | ||||||
2020 | 2019 | |||||
Income statement data: | ||||||
Sales | $ | 3,054 | $ | 2,917 | ||
Operating income | 300 | 314 | ||||
Interest expense | 88 | 69 | ||||
Net income | 203 | 198 | ||||
Other data: | ||||||
Average number of common shares outstanding | 41.7 | 47.1 | ||||
Total dividends paid | $ | 54.0 | $ | 52.7 | ||
Required:
- Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
- Calculate return on equity for 2020 and 2019.
- Calculate
working capital and thecurrent ratio for each of the past three years. - Calculate earnings per share for 2020 and 2019.
- If Wiper's stock had a price/earnings ratio of 11 at the end of 2020, what was the market price of the stock?
- Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
- Calculate the dividend payout ratio for 2020.
- Assume that
accounts receivable at December 31, 2020, totaled $313 million. Calculate the number of days' sales in receivables at that date. - Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
- Calculate the times interest earned ratio for 2020 and 2019.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Includes step-by-step video
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning