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
Related questions
Question
Do Ratio Analysis of Allied Food Products. Interpret the answers. (Current ratio, quick ratio, debt ratio)
Transcribed Image Text:Allied Food Products: December 31 Balance Sheets
(Millions of Dollars)
TABLE 3-1
2005
2004
Assets
10
80
Cash and equivalents
Accounts receivable
375
315
415
$ 810
615
Inventories
$1,000
1,000
$2,000
Total current assets
870
Net plant and equipment et
$1,680
Total assets
Liabilities and Equity
Accounts payable
Notes payable
Accruals
2$
60
30
110
60
140
130
$ 220
$310
750
Total current liabilities.
580
Long-term bonds
$1,060
$ 800
Total debt
130
130
Common stock (50,000,000 shares)
Retained earnings
Total common equity
Total liabilities and equity
810
750
$ 880
$ 940
$2,000
$1,680
Book value
per
share =
$940/50 =
$18.80
TABLE 3-2
Allied Food Products: Income Statements for Years
Ending December 31 (Millions of Dollars, Except for
Per-Share Data)
2005.
2004
Net sales
$3,000.0
2,616.2
$2,850.0
Operating costs except depreciation
Earnings before interest, taxes, and depreciation
(EBITDA)
Depreciation
Earnings before interest and taxes (EBIT)
2,497.0
$383.8
$ 353.0
100.0
90.0
$ 283.8
$ 263.0
Less interest
88.0
60.0
Earnings before taxes (EBT)
$ 195.8
$203.0
Taxes
78.3
81.2
117.5EA FC
24
Net income
$ 121.8
Common dividends
57.5
$4
53.0
Addition to retained earnings
24
60.0
2$
68.8
ommon stock price7 maoket Koice.
Earnings per share (EPS)
E
Per-share data:
$ 26.00
$ 23.00
$4
2.35
$4
2.44
Dividends
per
share (DPS)
$4
1.15
1.06
Book value
share (BVPS)
$ 18.80
2$
$ 17.60
24
per
Cash flow per share (CFPS)C
4.35
4.24
Notes:
Operating costs include leaselpayments of $28 million.
Allied has no amortization charges.
Allied has 50 million shares df common stock outstanding. Note that EPS is based on net
income available to common stockholders. Calculations of EPS, DPS, BVPS, and CFPS for 2005
%24
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