Use information from the balance sheet and income statement to calculate the following financial ratios and the market value added (MVA).(Whenever balance sheet numbers are used to calculate financial ratios, please ensure that you use the average of the 2019 and 2020 numbers in your calculation. To calculate MVA, you can assume that the average book value number for common stock and paid-in-surplus is the amount that the shareholders initially invested in the company.) Market Value RatiosMarket-to-book ratioMarket Value Added ($M) GRIZZLY BEAR MUFFIN COMPANYBalance SheetIncome Statement ($M)Assets ($M)Liabilities & Shareholders' Equity ($M)20192020201920202020Current AssetsCashCurrent LiabilitiesAccounts PayableNotes PayableSales$84,4095,2905,8226,1207,098Cost of goods sold58,21826,191Accounts Receivable3,6566,5172,7383,1682,700Gross ProfitInventoryTotal Current Assets5,58613,614Other Current Liabilities4,088Depreciation7,4103,05515,995Total Current Liabilities12,34313,886EBIT18,781Interest Expense3,281|Long Term Debt19,00022,000Taxable Income15,500Fixed AssetsTaxes (35%)5,425$10,075Shareholders' EquityCommon Stock & paid-in-surplusAccumulated Retained EarningsTotal Shareholders EquityNet Plant and Equipment71,43379,669Net Income9,0009.000Dividends4,00144,704Retained Earnings50,77859,7786,07453,704EPS4.03Total Assets$85,047$95,664Total Liabilities & Shareholders' Equity | $85,047$95,664PE Ratio14.5

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Answered: Use information from the balance sheet…

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 103.2C

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Use information from the balance sheet and income statement to calculate the following financial ratios and the market value added (MVA).

(Whenever balance sheet numbers are used to calculate financial ratios, please ensure that you use the average of the 2019 and 2020 numbers in your calculation. To calculate MVA, you can assume that the average book value number for common stock and paid-in-surplus is the amount that the shareholders initially invested in the company.)

Market Value Ratios
Market-to-book ratio
Market Value Added ($M)

GRIZZLY BEAR MUFFIN COMPANY
Balance Sheet
Income Statement ($M)
Assets ($M)
Liabilities & Shareholders' Equity ($M)
2019
2020
2019
2020
2020
Current Assets
Cash
Current Liabilities
Accounts Payable
Notes Payable
Sales
$84,409
5,290
5,822
6,120
7,098
Cost of goods sold
58,218
26,191
Accounts Receivable
3,656
6,517
2,738
3,168
2,700
Gross Profit
Inventory
Total Current Assets
5,586
13,614
Other Current Liabilities
4,088
Depreciation
7,410
3,055
15,995
Total Current Liabilities
12,343
13,886
EBIT
18,781
Interest Expense
3,281
|Long Term Debt
19,000
22,000
Taxable Income
15,500
Fixed Assets
Taxes (35%)
5,425
$10,075
Shareholders' Equity
Common Stock & paid-in-surplus
Accumulated Retained Earnings
Total Shareholders Equity
Net Plant and Equipment
71,433
79,669
Net Income
9,000
9.000
Dividends
4,001
44,704
Retained Earnings
50,778
59,778
6,074
53,704
EPS
4.03
Total Assets
$85,047
$95,664
Total Liabilities & Shareholders' Equity | $85,047
$95,664
PE Ratio
14.5

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