General accounting questions GreenAgri Ltd. is a company engaged in theproduction and distribution of agriculturalfertilizers and chemicals. The companymanufactures various nitrogen-based andphosphate-based fertilizers for commercialfarming and industrial use. The average P/E ratiofor companies in the agricultural chemicalindustry, similar to GreenAgri Ltd., is 18. IfGreenAgri Ltd.'s projected earnings per share(EPS) are $5, what should be its estimated shareprice based on the industry average P/E ratio?

To estimate GreenAgri Ltd.'s share price, we use the Price-to-Earnings (P/E) ratio formula:Share…

Answered: GreenAgri Ltd. is a company engaged in…

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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Coke and Pepsi are well-known international brands. Coca-Cola Co. sells more than $34.5 billion each year while annual sales of PepsiCo products exceed $66 billion. Compare the two companies as a potential investment based on the following ratios as reported by csimarket.com for the twelve months ended September 27, 2019: Ratio PepsiCo a. Gross profit percentage Coca-Cola 61.30% 22.70% b. Net profit margin 55.00% 18.00% e. EPS $ 1.66 $ 8.82 d. Inventory turnover ratio 4.20 8.30 e. Current ratio 0.62 0.95 f. Debt-to-assets 0.76 0.82 9. P/E ratio 32.50 15.50 Required: 1. For each ratio listed, indicate whether it would be used to compare profitability, liquidity, or solvency, or whether it is not applicable (NA) to comparing companies. a. Gross profit percentage b. Net profit margin C. EPS d. Inventory turnover ratio e. Current ratio f. Debt-to-assets 9. P/E ratio
MPI Incorporated has $6 billion in assets, and its tax rate is 35%. Its basic earningpower (BEP) ratio is 11%, and its return on assets (ROA) is 6%. What is MPI’s timesinterest-earned (TIE) ratio?
The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results: Alpha Beta Sales $3,000,000 $2,500,000 Operating income 750,000 550,000 Taxable income 650,000 375,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. Required: What are the respective return-on-investment ratios for the Alpha and Beta Divisions? a. 0.110 and 0.125 b. 0.125 and 0.110 c. 0.050 and 0.150 d. 0.108 and 0.075
Nutrien agriculture corporation produce solution this general accounting question
Scranton Shipyards has $19 million in total net operating capital. The company's WACC is 13 percent. What is Scranton's EVA? If negative, use the negative sign instead of parentheses, e.g. -130,000. The company has the following income statement: Sales $10.0 million Operating costs 6.0 million Operating income (EBIT) $ 4.0 million Interest expense 2.0 million Earnings before taxes (EBT) $ 2.0 million Taxes (40%) 0.8 million Net income $ 1.2 million
Following are data for BioBeans and GreenKale, which sell organic produce and are of similar size. Average total assets Net sales Net income BioBeans $227,500 115,000 11,375 Greenkale $174,000 69,600 2,800 Required: 1a. Compute the profit margin for both companies. 1b. Compute the return on total assets for both companies. 2. Based on analysis of these two measures, which company is the preferred investment?
Cobalt Industries had sales of 148,100 units at a price of $9.08 per unit. It faced fixed operating costs of $240,000 and variable operating costs of $4.56 per unit. The company is subject to a tax rate of 38% and has a weighted average cost of capital of 8.7%. Calculate Cobalt's net operating profits after taxes (NOPAT), and use it to estimate the value of the firm. (Assume the firm's earnings are not growing.) Cobalt's NOPAT is $ (Round to the nearest dollar.) (...
Sasol is a major South Africa energy and chemicals group. It mines coal and produces liquid fuels and chemical products. The group also produces gas and oil. Sasol is the largest producer of synthetic fuels in the world with sales of over R181 billion. In the 2013 integrated report, Sasol indicated that its weighted average cost of capital (WACC) is12.95% in South Africa, 8% - 11.2% in Europe and 8% in the USA. Sasol’s share price appreciated strongly in 2013 and early 2014 before falling significantly at the end of 2014 due to the collapse in oil prices. Sasol reported that the volatility of financial markets, the lack of liquidity and the increase in the cost of debt affected the company’s cost of capital.(a) Why should the weighted average cost of capital (WACC) be used to evaluate the required return on a project?(i) Calculate the WACC from the following, using two different approaches to calculate the weighting factors (using balance sheet values and market value).Balance Sheet…
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The marketing department of Metroline Manufacturing estimates that its sales in 2016 will be $1.68 million. Interest expense is expected to remain unchanged at $35,000, and the firm plans to pay $66,000 in cash dividends during 2016. Metroline Manufacturing's income statement for the year ended December 31, 2015, is given along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2016. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2016. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2016 income? Explain why.
Following are data for BioBeans and GreenKale, which sell organic produce and are of similar size. GreenKale $ 154,500 77,250 7,000 Average total assets Net sales Net income 1a. Compute the profit margin for both companies. 1b. Compute the return on total assets for both companies. 2. Based on analysis of these two measures, which company is the preferred investment? BioBeans $ 195,000 65,000 13,650 Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Compute the profit margin for both companies. BioBeans GreenKale Numerator: Profit margin 1 1 1 Denominator: Required 1A II Profit margin ratio = Profit margin ratio = Required 1B % %

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