Calculate the inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. Has the company’s ability to manage its assets improved or worsened? Explain. A computer manufacturer has financial statements as follows: Income Statements for Year Ending December
Calculate the inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. Has the company’s ability to manage its assets improved or worsened? Explain.
A computer manufacturer has financial statements as follows:
|
Income Statements for Year Ending December 31 |
|||||
|
(Thousands of Dollars) |
2019 |
2018 |
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|
Sales |
$945,000 |
$900,000 |
|||
|
Expenses excluding depreciation and amortization |
812,700 |
774,000 |
|||
|
EBITDA |
$132,300 |
$126,000 |
|||
|
Depreciation and amortization |
33,100 |
31,500 |
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|
EBIT |
$99,200 |
$94,500 |
|||
|
Interest Expense |
10,470 |
8,600 |
|||
|
EBT |
$88,730 |
$85,900 |
|||
|
Taxes (25%) |
22,183 |
21,475 |
|||
|
Net income |
$66,547 |
$64,425 |
|||
|
Common dividends |
$56,609 |
$54,115 |
|||
|
Addition to |
$9,938 |
$10,310 |
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|
Balance Sheets for Year Ending December 31 |
|||||
|
(Thousands of Dollars) |
|||||
|
Assets |
2019 |
2018 |
|||
|
Cash and cash equivalents |
$47,250 |
$45,000 |
|||
|
Short-term investments |
3,800 |
3,600 |
|||
|
Accounts Receivable |
283,500 |
270,000 |
|||
|
Inventories |
141,750 |
135,000 |
|||
|
Total current assets |
$476,300 |
$453,600 |
|||
|
Net fixed assets |
330,750 |
315,000 |
|||
|
Total assets |
$807,050 |
$768,600 |
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|
Liabilities and equity |
|||||
|
Accounts payable |
$94,500 |
$90,000 |
|||
|
Accruals |
47,250 |
45,000 |
|||
|
Notes payable |
26,262 |
9,000 |
|||
|
Total current liabilities |
$168,012 |
$144,000 |
|||
|
Long-term debt |
94,500 |
90,000 |
|||
|
Total liabilities |
$262,512 |
$234,000 |
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|
Common stock |
444,600 |
444,600 |
|||
|
Retained Earnings |
99,938 |
90,000 |
|||
|
Total common equity |
$544,538 |
$534,600 |
|||
|
Total liabilities and equity |
$807,050 |
$768,600 |
|||
|
Other data |
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|
Tax rate |
25% |
Shares outstanding 15,000,000
Stock price $65 per share
|
WACC |
8% |
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