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Determine the financial evaluations

Assignment Help Managerial Economics
Reference no: EM13508901

Question

Using the Income Statement and Balance Sheet below determine the following financial evaluations. Put answers using equations in the cells under "Answers" in Column C.

Answers

a Market capitalization
b Current ratio
c Quick Ratio
d Debt Ratio
e Earnings per share (EPS)
f Price Earnings Ratio (PE)
g Profit Margin
h Briefly, within the space provided below, discuss implications of the above answers.

 

Income Statement Year x
  Balance Sheet Year x
Revenue
$15,000,000
Assets



Returns, Credits, etc. ($5,000)

Current Assets

Net Sales (Revenue) $14,995,000


Cash $80,000
Direct Costs



Accounts receivable $60,000

Labor ($4,000,000)


Finished Goods Inventory $40,000

Materials ($2,500,000)


Materials Inventory $60,000

Cost of Goods Sold (COGS) ($6,500,000)

Total Current Assets $240,000

Gross Margin $8,495,000




Selling General and Admin.


Long term Assets

Marketing ($1,250,000)


Buildings $10,000,000

Research and Development ($1,000,000)


Furniture $3,000,000

Administration ($750,000)


Other $1,500,000

Other ($500,000)

Total Fixed Assets $14,500,000

Depreciation ($250,000)
Total Assets   $14,740,000

S G & A ($3,750,000)




Earnings Before Interest and Taxes (EBIT) $4,745,000
Liabilities


Interest Expense/Income ($162,300)

Current Liabilities

Pre-tax Income $4,582,700


Notes Payable $100,000

Income Tax @ 30% ($1,374,810)


Accounts Payable $125,000

Net Income $3,207,890


Taxes Payable $10,000





Total Current Liabilities $235,000





Long Term Liabilities






Bank Loans @ 6% $455,000

Current Stock Price $28.00


Mortgage @ 4.5% $3,000,000

Current Outstanding Shares 600,000

Total Long Term Liabilities $3,455,000













Capital Stock  $9,900,000






Retained Earnings $1,150,000




  Stockholders Equity   $11,050,000




Total Liabilities and Stockholders equity   $14,740,000

 

Reference no: EM13508901

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