Review the results of these calculations evaluate the

Assignment Help Accounting Basics

Reference no: EM13599623

Presented here are summarized data from the balance sheets and income statements of Wiper, Inc.:
WIPER, INC.
Condensed Balance Sheets
December 31, 2009, 2008, 2007 ( in millions)
2009 2008 2007

Current assets . . . . . . . . . . . . . . . . . .. . $ 677 $ 891 $ 736
Other assets . . . . . . . . . . . . . . . . . . . . . 2,413 1,920 1,719
$ 3,090 $ 2,811 $ 2,455
Current liabilities . . . . . . . . . . . . . . . . . . $ 562 $ 803 $ 710
Long- term liabilities . . . . . . . . . . . . . . . 1,521 982 827
Owners' equity . . . . . . . . . . . . . . . . . . 1,007 1,026 918
$ 3,090 $ 2,811 $ 2,455

WIPER, INC.
Selected Income Statement and Other Data For the Years Ended
December 31, 2009 and 2008 ( in millions)
2009 2008

Income statement data: Sales . . .................... .$ 3,050 $ 2,913
Operating income . . . . . . . . . ........................ . . . 296 310
Interest expense . . . . . . . . ........................ . . . . 84 65
Net income . . . . . . . . ................... . . . . . . .. . . 192 187
Other data:
Average number of common shares outstanding . .. . 41.3 46.7
Total dividends paid . . . . . . . . . . . . . . . . . . . . . ... . $ 50.0 $ 52.3

Required:
a. Calculate return on investment, based on net income and average total assets, for 2009 and 2008. Show both margin and turnover in your calculation.
b. Calculate return on equity for 2009 and 2008.
c. Calculate working capital and the current ratio for each of the past three years.
d. Calculate earnings per share for 2009 and 2008.
e. If Wiper's stock had a price/ earnings ratio of 13 at the end of 2009, what was the market price of the stock?
f. Calculate the cash dividend per share for 2009 and the dividend yield based on the market price calculated in part e.
g. Calculate the dividend payout ratio for 2009.
h. Assume that accounts receivable at December 31, 2009, totaled $ 309 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, 2009 and 2008.
j. Calculate the times interest earned factor for 2009 and 2008.
k. Review the results of these calculations, evaluate the profitability and liquidity of this company, and state your opinion about its suitability as an investment for a young, single professional with funds to invest in common stock.

Reference no: EM13599623

Questions Cloud

On january 1 of year 1 arthur and aretha franklin purchased : on january 1 of year 1 arthur and aretha franklin purchased a home for 1.40 million by paying 230000 down and borrowing

Comptac inc which is headquartered in san francisco : comptac inc. which is headquartered in san francisco california is one of the leading software manufacturers in the

Lamont works for a company in downtown chicago the firm : lamont works for a company in downtown chicago. the firm encourages employees to use public transportation to save the

Carla and eliza share income equally during the current : carla and eliza share income equally. during the current year the partnership net income was 40000. carla made

Review the results of these calculations evaluate the : presented here are summarized data from the balance sheets and income statements of wiper inc. wiper inc. condensed

Maggie sharrer a recent graduate of rollings accounting : maggie sharrer a recent graduate of rollings accounting program evaluated the operating performance of poway companys

Regional airways inc a small two-plane passenger airline : regional airways inc. a small two-plane passenger airline has asked for your assistance in some basic analysis of its

Discuss how those control procedures would be best : alden inc. has hired you to review its internal controls for the purchase receipt storage and issuance of raw

A school district wants to establish a separate fund to : a school district wants to establish a separate fund to acquire store and sell school supplies to individual schools

User Account

All Pages