Given answer with calculation 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 based on the industry average Price-to-Earnings (P/E)…

Answered: GreenAgri Ltd. is a company engaged in…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 3MAD: Deere Company (DE) manufactures and distributes farm and construction machinery that it sells...

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MBI Incorporated had sales of $35 million for fiscal 2022. The company's gross profit ratio for that year was 26%. Required: a. Calculate the gross profit and cost of goods sold for MBI for fiscal 2022. b. Assume that a new product is developed and that it will cost $469 to manufacture. Calculate the selling price that must be set for this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2022. c. From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to assess its ultimate prospects for success at this price. Complete this question by entering your answers in the tabs below. Required A Required B Required C From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to assess its ultimate prospects for success at this price.
Macon Mills is a division of Bolin Products, Inc. During the most recent year, Macon had a net income of $40 million. Total assets were $470 million, non-interest-bearing current liabilities were $72,000,000. What are the invested capital and ROI for Macon? Solution What is the invested capital (Total Assets – Non-Interest-Bearing Current Liabilities)? What is the ROI (Net Income/Invested Capital)?
Bombay Corporation has income from operations of $42,000, invested assets of $210,000, and sales of $840,000. Use the DuPont formula to compute the rate of return on investment (ROI). Show the following: a) Profit Margin b) Investment Turnover c) Rate of Return on Investment (ROI)
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
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
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
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…
Vernon Corporation makes and sells state-of-the art electronics products. One of its segments produces the math machine, an in expensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expnses associated with the segment's operating activities. The relevant range for the production and sale of the range for the production and sale of the calculators is between 33,000 and 71,000 units per year. Revenue (47,000 unitsx9.00) $423,000 Unit-level variable costs Materials cost (47,000x$2.00) ($94,000) labor cost (47,000x1.00) ($47,000) manufacturing overhead (47,000x $0.20) ($9,400) shipping and handling (47,000x $0.24) ($11,280) Sales commissions (47,000x$2.00) ($94,000) contribution margin $167,320 Fixed expenses Advertising costs ($30,000) Salary of production supervisor ($66,000) Allocated company-wide facility-level expenses ($82,000) Net loss ($10,680) Required A) A large discount store has approached the…
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Patterson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. PATTERSON COMPANY Income Statements for the Year 2014 Segment Sales Cost of goods sold А В C $164,000 $250,000 $245,000 (84,000) (29,000) |(130,000) (18,000) (80,000) (22,000) Sales commissions Contribution margin 143,000 16,000 137,000 General fixed oper. exp. (allocation of president's salary) Advertising expense (specific to individual divisions) (37,000) (32,000) (34,000) (5,000) (11,000) 0 (26,000) $ 94,000 $ 109,000 Net income Required: a. Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Effect on income b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. PATTERSON COMPANY Comparative Income Statements for the Year 2014 Eliminate Seg. A Decision Keep Seg. A Sales Cost…
Lewis Company has operating income of $265,000. Its return on investment (ROI) is 53%, while its target rate of return is 7%. The total assets of Lewis Company may be closest to O A. $140,450. O B. $3,785,714. O C. $18,550. O D. $500,000

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