Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 5, Problem 1AIC
Compute the values of each of the ratios in Exhibit 5.27 for Starbucks for 2012. Starbucks had 749.3 million common shares outstanding at the end of fiscal 2012, and the market price per share was $50.71. For days accounts receivable outstanding, use only specialty revenues in your calculations, because accounts receivable are primarily related to licensing and food service operations, not the retail operations.
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Debt and price-earnings ratios
The Home Depot, Inc. (HD) operates over 2,200 home improvement retail stores and is a competitor of Lowe's (LOW). The following data (in millions) were adapted from recent financial statements of The Home Depot.
Year 2
Year 1
Total assets
$39,946
$40,518
Total liabilities
30,624
27,996
Total stockholders’ equity
9,322
12,522
Earnings per share
$4.74
$3.78
1. Compute the debt ratio for Years 1 and 2. Round to one decimal place.
Year 2
Year 1
Debt ratio
_______%
_______%
2. Given your answer to part (1), what is the ratio of stockholders' equity to total assets? Round to one decimal place.
Year 2
Year 1
Ratio of stockholders' equity to total assets
_______%
_______%
3. Compute the ratio of liabilities to stockholders' equity. Round to one decimal place.
Year 2
Year 1
Ratio of liabilities to…
Use the information provided below to answer the question. The ratios are for last year, for ABC Inc and the average of its industry as follows
ABC Inc Industry Average
Inventory $150,000 $100,000
Accounts Receivable 24,000 24,000
Other Assets 76,000 76,000
Total Assets $250,000 $200,000
Profit Margin 1.8% 2%
Equity $ 125,000 $ 125,000
Sales $ 1,100,000 $ 1,000,000
What is ABC’s Return on Equity (ROE)?
Please see attached image for the question also please show working.
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too.
Barry Computer Company:
Balance Sheet as of December 31, 2018 (In Thousands)
Cash
$123,525
Accounts payable
$219,600
Receivables
494,100
Other current liabilities
164,700
Inventories
329,400
Notes payable to bank
150,975
Total current assets
$947,025
Total current liabilities
$535,275
Long-term debt
$384,300
Net fixed assets
425,475
Common equity (45,292.5 shares)
452,925
Total assets
$1,372,500
Total liabilities and equity
$1,372,500
Barry Computer Company:Income Statement for Year Ended December 31, 2018 (In Thousands)
Sales
$2,250,000
Cost of goods sold
Materials
$1,102,500
Labor
450,000
Heat,…
Chapter 5 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - A firm has experienced an increasing current ratio...Ch. 5 - A firm has experienced a decrease in its current...Ch. 5 - Prob. 5QECh. 5 - A firm had the following values for the four debt...Ch. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QE
Ch. 5 - Market equity beta measures the covariability of a...Ch. 5 - Altmans bankruptcy risk model utilizes the values...Ch. 5 - Calculating and Interpreting Risk Ratios. Refer to...Ch. 5 - Refer to the financial state-ment data for...Ch. 5 - Refer to the profitability ratios of Coca-Cola in...Ch. 5 - Delta Air Lines, Inc., is one of the largest...Ch. 5 - Prob. 17PCCh. 5 - Prob. 18PCCh. 5 - Prob. 19PCCh. 5 - Prob. 20PCCh. 5 - Prob. 21PCCh. 5 - Prob. 22PCCh. 5 - Compute the values of each of the ratios in...
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