Calculate the common size income statement for the company

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Reference no: EM132036470

Use the following financial sheets and information for all questions.

The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Tax rate 40%

Stock price $17.00

Shares outstanding 3,800,000

Dividends are 50% of net income

Income Statement

Period Ending 31-Dec-13

Total Revenue 148,239,000

COGS 118,094,000

Selling General and Administrative 13,384,000

Depreciation 72,000

Earnings Before Interest And Taxes 16,689,000

Interest Expense 829,000

Income Before Tax 15,860,000

Income Tax Expense (40%) 6,344,000

Net Income 9,516,000

Balance Sheet

Date 31-Dec-13

Assets

Current Assets

Cash 14,468,000

Net Receivables 98,359,000

Inventory 18,758,000

Total Current Assets 131,585,000

Property Plant and Equipment 70,441,000

Total Assets 202,026,000

Liabilities

Current Liabilities

Accounts Payable 22,446,500

Accruals 14,315,500

Notes Payable 3,631,000

Total Current Liabilities 40,393,000

Long Term Debt 134,919,000

Total Liabilities 175,312,000

Stockholders' Equity
Common Stock 40,000
Retained Earnings 26,674,000

Total Stockholder Equity 26,714,000

Total Assets 202,026,000

Question/Problem 1)

1. What is the firm's current ratio?

2. What is the firm's days-sales-outstanding (DSO)? Assume a 360-day year for this calculation.

3. What is the firm's total assets turnover?

4. What is the firm's inventory turnover ratio?

5. What is the firm's TIE?

6. What is the firm's ROA?

7. What is the firm's basic earning power?

8. What is the firm's ROE?

9. What is the firm's P/E ratio?

10. What is the firm's market-to-book ratio?

Question/Problem 2)

Calculate the additional or external funds needed if the firm is expecting a growth rate of 10% next year. The firm is currently operating at 95% of capacity and the fixed assets can only by $10,000,000 increments.

Question/Problem 3)

Calculate the common size balance sheet and the common size income statement for the company.

Reference no: EM132036470

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