High's Companies, a home improvement store chain, reported the following summarized figures: E (Click the icon to view the income statement.) E (Click the icon to view the balance sheets.) High's has 50,000 common shares outstanding during 2018. Read the requirements. Requirement 1. Compute the debt ratio and the debt to equity ratio at May 31, 2018, for High's Companies. Begin by selecting the formula to calculate High's Companies debt ratio. Then enter the amounts and calculate the debt ratio for 2018. (Round the ratio to one tenth of a percent, X_X%.). Debt ratio Income Statement Requirements High's Companies Income Statement Years Ended May 31, 2018 and 2017 1. Compute the debt ratio and the debt to equity ratio at May 31, 2018, for High's Companies 2. Is High's ability to pay its liabilities strong or weak? Explain your reasoning. 2018 2017 Net Sales Revenue %$4 46,500 $ 39 800 Cost of Goods Sold 20,600 29 300 Interest Expense 140 Print Done 400 All Other Expenses 7,500 7.800 Net Income %24 18,000 $ 2,560 Print Done
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
