Reference no: EM131991202

BALANCE SHEETS:    2016 2017

Assets:

                        Cash                                        100,000                       160,000

                        Accounts Receivable               540,000                       620,000

                        Inventory                                345,000                       290,000

                        Fixed Assets, net                     370,000                       510,000

                        Total Assets                            1,355,000                    1,580,000

Liabilities and Equity:

                        Accounts Payable                    350,000                       375,000

                        Long-term Debt                      500,000                       645,000

                        Common Stock                       50,000                         55,000

                        Retained Earnings                   455,000                       505,000

                        Total Liabilities and Equity    1,355,000                    1,580,000

INCOME STATEMENT:

            Revenue                                                                                  3,500,000

            Cost of Goods Sold                                                                2,275,000

            General and Administrative                                                    525,000

            Depreciation Expense                                                             110,000

            Earnings Before Interest and Taxes                                        590,000

            Interest Expense                                                                      40,000

            Pretax Net Income                                                                  550,000

            Income Taxes                                                                          177,000

            Net Income                                                                             353,000

1. Assuming that all of Plyler’s sales were on credit, what was the company’s Days Sales Outstanding in 2017? (For balance sheet accounts, use the average of the beginning and end-of-year balances).

2. Starting with Net Income, show the calculation of Cash Flow from Operations for Plyler for 2017?

3. What was Plyler’s Equity Multiplier for 2017?

4. What was Plyler’s Return on Equity in 2017 (For balance sheet accounts, use the average of the beginning and end-of-year balances)?

5. If Plyler had 100,000 common shares outstanding during 2017 and its stock is currently worth $44.52 per share, what is the firm’s Price : Earnings (PE) ratio?

6. If Plyler projects 2018 sales to increase by 15% over 2017, its after-tax profit margin to remain the same, and anticipates a 30% dividend payout ratio, what are its projected retained earnings by the end of 2018?

7. Assuming that Plyler’s net working capital varies directly with sales, based on a 15% sales increase in 2018, what is the projected (or pro forma) accounts receivable balance at the end of 2018?

8. If Plyler projects that by the end of 2017, it was operating at 70% of capacity, what is its full level capacity of sales?

9. Stop and Shop Supermarkets has a 4.5% profit margin and a 15% dividend payout ratio. The total asset turnover is 1.4 and its debt-equity ratio is 0.5. What is its sustainable rate of growth?

10. Merrick Town Bagel has a 9% percent return on assets and a 80% percent retention ratio. What is its internal growth rate?