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