ABC Corporation Comparative Income Statements in € For the Years Ended December 31, 20X3 and 20X2 20X3 20X2 Net Sales 4,915,200 4,719,600 Cost of goods (3,133,200) (3,012,600) Gross margin 1,782,000 1,707,000 Operating expenses Selling expenses (715,200) (777,000) General & administrative expenses (670,800) (634,800) Total operating expenses (1,386,000) (1,411,800) Income from operations 396,000 295,200 Interest expense (98,400) (58,800) Net income before taxes 297,600 236,400 Income taxes (93,600) (85,200) Net income after taxes 204,000 151,200 Earnings per share 3.4 2.52 ABC Corporation Comparative Balance Sheets in € December 31, 20X3 and 20X2 Assets 20X3 20X2 Liabilities & Stockholders' Equity 20X3 20X2 Fixed assets: Stockholders' equity: Property, plant and equipment (net) 1,687,500 1,080,000 Common stock 10 par value 600,000 600,000 Total fixed assets 1,125,000 1,080,000 Retained earnings 561,000 461,400 Total stockholders' equity 1,161,000 1,061,400 Current assets: Long - term liabilities: Inventory 862,200 892,200 Bonds payable 600,000 - Accounts Receivable (net) 353,400 343,800 Total long-term liabilities 600,000 - Cash and cash equivalents 121,800 61,200 Current liabilities: Total current assets 1,337,400 1,297,200 Notes payable 300,000 600,000 Accounts payable 401,400 715,800 Total current liabilities 701,400 1,315,800 Total liabilities 1,301,400 1,315,800 Total assets 2,462,400 2,377,200 Total liabilities & stockholders' equity 2,462,400 2,377,200 20X3 20X2 Net Capital Expenditures 60,000 97,500 Dividends Paid 66,000 51,000 Common shares Outstanding 60,000 60,000 Stock Price 27 45 Required: Prepare a long-term solvency analysis by calculating for each year the total liabilites-to-equity ratio and the interest coverage ratio. Prepare a market strength analysis by calculating for each year the P/E ratio and the dividends yield

ABC Corporation Comparative Income Statements in € For the Years Ended December 31, 20X3 and 20X2 20X3 20X2 Net Sales 4,915,200 4,719,600 Cost of goods (3,133,200) (3,012,600) Gross margin 1,782,000 1,707,000 Operating expenses Selling expenses (715,200) (777,000) General & administrative expenses (670,800) (634,800) Total operating expenses (1,386,000) (1,411,800) Income from operations 396,000 295,200 Interest expense (98,400) (58,800) Net income before taxes 297,600 236,400 Income taxes (93,600) (85,200) Net income after taxes 204,000 151,200 Earnings per share 3.4 2.52 ABC Corporation Comparative Balance Sheets in € December 31, 20X3 and 20X2 Assets 20X3 20X2 Liabilities & Stockholders' Equity 20X3 20X2 Fixed assets: Stockholders' equity: Property, plant and equipment (net) 1,687,500 1,080,000 Common stock 10 par value 600,000 600,000 Total fixed assets 1,125,000 1,080,000 Retained earnings 561,000 461,400 Total stockholders' equity 1,161,000 1,061,400 Current assets: Long - term liabilities: Inventory 862,200 892,200 Bonds payable 600,000 - Accounts Receivable (net) 353,400 343,800 Total long-term liabilities 600,000 - Cash and cash equivalents 121,800 61,200 Current liabilities: Total current assets 1,337,400 1,297,200 Notes payable 300,000 600,000 Accounts payable 401,400 715,800 Total current liabilities 701,400 1,315,800 Total liabilities 1,301,400 1,315,800 Total assets 2,462,400 2,377,200 Total liabilities & stockholders' equity 2,462,400 2,377,200 20X3 20X2 Net Capital Expenditures 60,000 97,500 Dividends Paid 66,000 51,000 Common shares Outstanding 60,000 60,000 Stock Price 27 45 Required: Prepare a long-term solvency analysis by calculating for each year the total liabilites-to-equity ratio and the interest coverage ratio. Prepare a market strength analysis by calculating for each year the P/E ratio and the dividends yield

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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ABC Corporation Comparative Income Statements in € For the Years Ended December 31, 20X3 and 20X2
	20X3	20X2
Net Sales	4,915,200	4,719,600
Cost of goods	(3,133,200)	(3,012,600)
Gross margin	1,782,000	1,707,000
Operating expenses
Selling expenses	(715,200)	(777,000)
General & administrative expenses	(670,800)	(634,800)
Total operating expenses	(1,386,000)	(1,411,800)
Income from operations	396,000	295,200
Interest expense	(98,400)	(58,800)
Net income before taxes	297,600	236,400
Income taxes	(93,600)	(85,200)
Net income after taxes	204,000	151,200
Earnings per share	3.4	2.52

ABC Corporation Comparative Balance Sheets in € December 31, 20X3 and 20X2
Assets	20X3	20X2	Liabilities & Stockholders' Equity	20X3	20X2
Fixed assets:			Stockholders' equity:
Property, plant and equipment (net)	1,687,500	1,080,000	Common stock 10 par value	600,000	600,000
Total fixed assets	1,125,000	1,080,000	Retained earnings	561,000	461,400
			Total stockholders' equity	1,161,000	1,061,400
Current assets:			Long - term liabilities:
Inventory	862,200	892,200	Bonds payable	600,000	-
Accounts Receivable (net)	353,400	343,800	Total long-term liabilities	600,000	-
Cash and cash equivalents	121,800	61,200	Current liabilities:
Total current assets	1,337,400	1,297,200	Notes payable	300,000	600,000
			Accounts payable	401,400	715,800
			Total current liabilities	701,400	1,315,800

			Total liabilities	1,301,400	1,315,800

Total assets	2,462,400	2,377,200	Total liabilities & stockholders' equity	2,462,400	2,377,200

	20X3	20X2
Net Capital Expenditures	60,000	97,500
Dividends Paid	66,000	51,000
Common shares Outstanding	60,000	60,000
Stock Price	27	45

Required:

Prepare a long-term solvency analysis by calculating for each year the total liabilites-to-equity ratio and the interest coverage ratio.
Prepare a market strength analysis by calculating for each year the P/E ratio and the dividends yield.

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