Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below. Balance Sheets: 2018 2017 Cash and equivalents $70 $55 Accounts receivable 275 300 Inventories 375 350 Total current assets $720 $705 Net plant and equipment 2,000 1,490 Total assets $2,720 $2,195 Accounts payable $150 $85 Accruals 75 50 Notes payable 120 145 Total current liabilities $345 $280 Long-term debt 450 290 Common stock 1,225 1,225 Retained earnings 700 400 Total liabilities and equity $2,720 $2,195 Income Statements: 2018 2017 Sales $2,000 $1,500 Operating costs excluding depreciation 1,250 1,000 EBITDA $750 $500 Depreciation and amortization 100 75 EBIT $650 $425 Interest 62 45 EBT $588 $380 Taxes (40%) 235 152 Net income $353 $228 Dividends paid $53 $48 Addition to retained earnings $300 $180 Shares outstanding 100 100 Price $25.00 $22.50 WACC 10.00% What is the firm’s 2018 current ratio? Round your answer to two decimal places. What is the firm’s 2018 net profit margin? Round your answer to four decimal places. % What is the firm’s 2018 price/earnings ratio? Round your answer to two decimal places.
Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below. Balance Sheets: 2018 2017 Cash and equivalents $70 $55 Accounts receivable 275 300 Inventories 375 350 Total current assets $720 $705 Net plant and equipment 2,000 1,490 Total assets $2,720 $2,195 Accounts payable $150 $85 Accruals 75 50 Notes payable 120 145 Total current liabilities $345 $280 Long-term debt 450 290 Common stock 1,225 1,225 Retained earnings 700 400 Total liabilities and equity $2,720 $2,195 Income Statements: 2018 2017 Sales $2,000 $1,500 Operating costs excluding depreciation 1,250 1,000 EBITDA $750 $500 Depreciation and amortization 100 75 EBIT $650 $425 Interest 62 45 EBT $588 $380 Taxes (40%) 235 152 Net income $353 $228 Dividends paid $53 $48 Addition to retained earnings $300 $180 Shares outstanding 100 100 Price $25.00 $22.50 WACC 10.00% What is the firm’s 2018 current ratio? Round your answer to two decimal places. What is the firm’s 2018 net profit margin? Round your answer to four decimal places. % What is the firm’s 2018 price/earnings ratio? Round your answer to two decimal places.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
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Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below.
Balance Sheets: | ||
2018 | 2017 | |
Cash and equivalents | $70 | $55 |
Accounts receivable | 275 | 300 |
Inventories | 375 | 350 |
Total current assets | $720 | $705 |
Net plant and equipment | 2,000 | 1,490 |
Total assets | $2,720 | $2,195 |
Accounts payable | $150 | $85 |
Accruals | 75 | 50 |
Notes payable | 120 | 145 |
Total current liabilities | $345 | $280 |
Long-term debt | 450 | 290 |
Common stock | 1,225 | 1,225 |
700 | 400 | |
Total liabilities and equity | $2,720 | $2,195 |
Income Statements: | ||
2018 | 2017 | |
Sales | $2,000 | $1,500 |
Operating costs excluding |
1,250 | 1,000 |
EBITDA | $750 | $500 |
Depreciation and amortization | 100 | 75 |
EBIT | $650 | $425 |
Interest | 62 | 45 |
EBT | $588 | $380 |
Taxes (40%) | 235 | 152 |
Net income | $353 | $228 |
Dividends paid | $53 | $48 |
Addition to retained earnings | $300 | $180 |
Shares outstanding | 100 | 100 |
Price | $25.00 | $22.50 |
WACC | 10.00% |
What is the firm’s 2018 current ratio? Round your answer to two decimal places.
What is the firm’s 2018 net profit margin? Round your answer to four decimal places.
%
What is the firm’s 2018 price/earnings ratio? Round your answer to two decimal places.
Using the DuPont equation, what is the firm’s 2018
%
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