Reference no: EM133032001

Problem - Presented here are summarized data from the balance sheets and income statements of Wiper Inc:

WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions)
	2020	2019	2018
Current assets	$771	$991	$853
Other assets	2,425	1,932	1,731
Total assets	$3,196	$2,923	$2,584
Current liabilities	$589	$842	$735
Long-term liabilities	1,588	1,043	919
Stockholders' equity	1,019	1,038	930
Total liabilities and stockholders' equity	$3,196	$2,923	$2,584

 

WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions)
	2020	2019
Income statement data:
Sales	$3,062	$2,925
Operating income	308	322
Interest expense	96	77
Net income	227	222
Other data:
Average number of common shares outstanding	42.5	47.9
Total dividends paid	$62.0	$53.5

Required -

a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019.

b. Calculate return on equity for 2020 and 2019.

c. Calculate working capital and the current ratio for each of the past three years.

d. Calculate earnings per share for 2020 and 2019.

e. If Wiper's stock had a price/earnings ratio of 13 at the end of 2020, what was the market price of the stock?

f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.

g. Calculate the dividend payout ratio for 2020.

h. Assume that accounts receivable at December 31, 2020, totaled $321 million. Calculate the number of days' sales in receivables at that date.

i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.

j. Calculate the times interest earned ratio for 2020 and 2019.