Use the following information for the Exercises below. (Algo)[The following information applies to the questions displayed below.]Simon Company's year-end balance sheets follow.At December 31AssetsCashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsLiabilities and EquityAccounts payableLong-term notes payableCommon stock, $10 par valueRetained earningsTotal liabilities and equityFor Year Ended December 31SalesCost of goods soldOther operating expensesExercise 13-11 (Algo) Analyzing profitability LO P3Interest expenseIncome tax expenseTotal costs and expensesNet incomeEarnings per shareFor both the current year and one year ago, compute the following ratios:Current YearThe company's income statements for the Current Year and 1 Year Ago, follow.$ 460,312233,92912,8289,810$ 34,59097,275124,80111,139312,664$ 580,469$ 143,091106,946162,500167,932$ 580,469Compute the price-earnings ratio for each year.Note: Round your answers to 2 decimal places.Current Year:1 Year Ago:Current YearRequired 1 Required 2 Required 3A Required 38Numerator:$ 754,6101 Year Ago716,879$ 37,731$ 2.32Additional information about the company follows.Common stock market price, December 31, Current YearCommon stock market price, December 31, 1 Year AgoAnnual cash dividends per share in Current YearAnnual cash dividends per share 1 Year AgoFor both the current year and one year ago, compute the following ratios:1. Return on equity.2. Dividend yield.$ 40,83368,65594,42610,403286,087$ 500,404< Required 2$ 84,568115,093162,500138,243$ 500,404Complete this question by entering your answers in the tabs below.Price-Earnings Ratio$ 387,063150,65713,6968,932$ 30.0028.000.380.193a. Price-earnings ratio on December 31.3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growtDenominator:1 Year AgoRequired 3B >2 Years AgoE$ 42,13455,61260,4354,823266,896$ 429,900=$ 55,61294,058163,500116,730$ 429,900$ 595,481560,348$ 35,133$ 2.16Price-Earnings RatioPrice-earnings ratio010

Calculation of Average common Stockholder's Equity for both yearscurrent Year1 Year Ago:Beginning…

Answered: For both the current year and one year…

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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You forecast to have a ROE of 14%, and dividend payout ratio of 12%. Currently the company has a price of $30 and $7 earnings per share. What is the PEG ratio based on market price?
Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) A. Sustainable growth rate _______% B. Internal growth rate ______%
Assume the following ratios are constant: Profit margin Total asset turnover 2.5 5.2% Equity multiplier 1.3 Payout ratio 22% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Answer is complete but not entirely correct. Sustainable growth rate 1.09 %
If we know that a firm has a net profit margin of 4.3%, total asset turnover of 0.77, and a financial leverage multiplier of 1.37, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity? The firm's ROE is %. (Round to two decimal places.) What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity? (Select from the drop-down menus.) Observe the modified DuPont formula (see) and notice that each component can be compared with industry standards to assess the firm's performance. Therefore, the advantage of using the Dupont system is that ROE is broken into three distinct components. Starting at the right we see how has increased assets over the owners' original equity. Next, moving to the left, we see how efficiently the firm used its sales. to…
Assume the following ratios are constant: Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 6.5% 1.6 20% What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %
Based on the information in the table, what is the growth duration for Georgia Gauge? Report your answer rounded to one decimal place. P/E Ratio Expected Growth Rate Dividend Yield Answer: S&P Industrials Georgia Gauge, Inc. 25 0.16 0.02 16 0.05 0.04
go.3
Determining PB Ratio for Companies with Different Returns and Growth Assume that the present value of expected ROPI follows a perpetuity with growth g (Value = Amount/ [r - g]). Determine the theoretically correct PB ratio for each of the following companies A and B. Note: NOPAT = NOA » RNOA. Company Net Operating Assets Equity RNOA ROE Weighted Avg. Cost of Capital Growth Rate in ROPI $100 $100 19% 19% 10% 2% $100 $100 12% 12% 10% 4% A B Round answers to two decimal places. PB Ratio Company A Company B
use EXCEL and provide Cell References for Calculations.
A company’s comparative statements are given below. Please conduct the following analyses: a. Horizontal analysis (trend analysis) on the income statement b. Vertical analysis (common size financial statement analysis) on the income statement Note: When the dollar change is positive, it indicates that the value increased and therefore the % change should be positive. Therefore, when calculating % change involving a negative baseline value, use the absolute value of the baseline number in the denominator: % change = (new value - original baseline value)/|baseline value|. Otherwise the % change will be inconsistent with the real change. For example:Let's say item A changed from -10 to +10. Item A increased by 20 and thus should give rise to a positive % change. However, % change based on formula using the original value of -10 is -200% = [10-(-10)]/(-10).Let’s look at another example. Assume item B changed from -10…
1.Compute the price to net income ratio for both Kohl's and Wal-Mart. Round your answers to two decimal places. 2.Use Kohl's and Wal-Mart as comparables, along with the equity to net income ratios from part (c), and then estimate for Target its equity intrinsic value and its equity intrinsic value per share. Round the equity intrinsic value to the nearest million and the value per share to the nearest cent.
-Based on the ratios calculated in Part 1, you will perform a ratio-based analysis. You should divide your discussion into four parts: liquidity, solvency, operational efficiency, and profitability. Ensure to choose the right ratios to discuss a specific part. -Find the relationships among ratios and trends over the three years compared. Also, compare these relationships and trends with those of Target. -In the last part of your discussion, you will show your investment decision: buy or not buy Walmart. You may want to split your investment between two companies. Tell me your rationale for your decision - Your discussion and final investment decision should solely be based on the ratio analysis, although investors also use various non financial information in their investment decision-making.

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