The Fisher Apparel Company balance sheet for the year ended Year 1 is as follows: December 31, Year 1 (in Thousands of Dollars) Assets Cash $4,280 Marketable securities 2,300 Accounts receivable 26,250 Inventories 39,605 Plant and equipment $71,650 Less: Accumulated depreciation 15,600 Net plant and equipment 56,050 Total assets $128,485 Liabilities and Stockholders’ Equity Accounts payable $12,066 Current portion of long-term debt 5,000 Accrued wages 800 Accrued taxes 2,400 Other current liabilities 2,800 Long-term debt 34,000 Common stock ($15 par) 22,500 Capital contributed in excess of par 19,100 Retained earnings 29,819 Total liabilities and stockholders’ equity $128,485 What is Fisher’s investment in current assets? Round your answer to the nearest whole number. Enter your answer in thousands. For example, an answer of $1.20 thousand should be entered as 1.20, not 1,200. $ thousand Determine Fisher’s working capital investment. Round your answer to the nearest whole number. Enter your answer in thousands. For example, an answer of $1.20 thousand should be entered as 1.20, not 1,200. $ thousand Determine Fisher’s current ratio. Round your answer to two decimal places.
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
The Fisher Apparel Company balance sheet for the year ended Year 1 is as follows:
| December 31, Year 1 | ||
| (in Thousands of Dollars) | ||
| Assets | ||
| Cash | $4,280 | |
| Marketable securities | 2,300 | |
| |
26,250 | |
| Inventories | 39,605 | |
| Plant and equipment | $71,650 | |
| Less: |
15,600 | |
| Net plant and equipment | 56,050 | |
| Total assets | $128,485 | |
| Liabilities and |
||
| Accounts payable | $12,066 | |
| Current portion of long-term debt | 5,000 | |
| Accrued wages | 800 | |
| Accrued taxes | 2,400 | |
| Other current liabilities | 2,800 | |
| Long-term debt | 34,000 | |
| Common stock ($15 par) | 22,500 | |
| Capital contributed in excess of par | 19,100 | |
| |
29,819 | |
| Total liabilities and stockholders’ equity | $128,485 | |
- What is Fisher’s investment in current assets? Round your answer to the nearest whole number. Enter your answer in thousands. For example, an answer of $1.20 thousand should be entered as 1.20, not 1,200.
$ thousand
- Determine Fisher’s
working capital investment. Round your answer to the nearest whole number. Enter your answer in thousands. For example, an answer of $1.20 thousand should be entered as 1.20, not 1,200.
$ thousand
- Determine Fisher’s
current ratio . Round your answer to two decimal places.
- Determine Fisher’s return on stockholders’ equity if its Year 1 earnings after tax are $13,000(000). Round your answer to two decimal places.
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