Answered: As part of your analysis, you are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

As part of your analysis, you are required to investigate Micron Industries’ cash flows and selected
ratios.
Required: Using the financial statement provided on page 1:

(a) Compute the following ratios for Micron Industries for 2018 and 2019:
i. Return on Equity using Du Pont Identity
ii. Earnings Per Share (EPS)
iii. Price/Earning (P/E) Ratio
iv. Book Value Per Share
v. Market-to-Book Ratio

(b) Calculate the following for 2019:
i. Operating Cash Flow
ii. Net Capital Spending
iii. Change in Net Working Capital
iv. Cash Flow from Assets
v. Cash Flow to Creditors
vi. Cash Flow to Stockholders

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