P4-6 Calculating Internal Growth [LO3]The most recent financial statements for Bello Company are shown here:Income Statement$ 3,7002,442$1,258302Net income $ 956SalesCostsTaxableincomeTaxes (24%)Multiple ChoiceWhat is the internal growth rate?C5.5%Assets and costs are proportional to sales. Debt and equity are not. The companymaintains a constant 26 percent dividend payout ratio.14.18%5.4%1.87%Current assets $3,933Fixed assets 9,628$ 13,561Total5.6%Balance SheetDebtEquityTotal$ 7,8635,698$ 13,561

The internal growth rate represents the rate of growth achieved by a firm without obtaining external…

P4-6 Calculating Internal Growth [LO3] The most recent financial statements for Bello Company are shown here: Income Statement Sales Costs Taxable income Taxes (24%) Net income $ 3,700 2,442 $1,258 302 $956 Balance Sheet Current assets $3,933 Debt Fixed assets 9,628 Equity Total $ 13,561 Total $7,863 5,698 $ 13,561

P4-6 Calculating Internal Growth [LO3] The most recent financial statements for Bello Company are shown here: Income Statement Sales Costs Taxable income Taxes (24%) Net income $ 3,700 2,442 $1,258 302 $956 Balance Sheet Current assets $3,933 Debt Fixed assets 9,628 Equity Total $ 13,561 Total $7,863 5,698 $ 13,561

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

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Income Statement Balance Sheet Sales $ 29,300 Assets $ 22,500 Debt $ 6,000 Costs 22,870 Equity 16,500 Net income $ 6,430 Total $ 22,500 Total $ 22,500 The company has predicted a sales increase of 6 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Pro forma balance sheet Sales Assets Debt Costs Equity Net income Total Total What is the external financing needed?
Vertical analysis The following income statement data for AT&T Inc. and Verizon Communications Inc. were taken from their recent annual reports (in millions): AT&T Verizon Revenues $132,447 $127,079 Cost of services (expense) 60,611 49,931 Selling and marketing expense 39,697 41,016 Depreciation and other expenses 20,393 16,533 Operating income $ 11,746 $ 19,599 Required: a. Prepare a vertical analysis of the income statement for AT&T. Round to one decimal place. AT&T Income Statement Amount Percent Revenues Cost of services (expense) Selling and marketing expense Depreciation and other expenses Operating income b. Prepare a vertical analysis of the income statement for Verizon. Round to one decimal place. Verizon Income Statement Amount Percent Revenues Cost of services (expense) Selling and marketing expense Depreciation and other expenses Operating…
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Trend Analysis Critelli Company has provided the following comparative information: Year 5 Year 4 Year 3 Year 2 Year 1 Net income $940,300 $810,600 $681,200 $582,200 $493,400 Interest expense 319,700 291,800 252,000 192,100 153,000 Income tax expense 300,896 226,968 190,736 151,372 118,416 Average total assets 5,779,817 5,103,704 4,360,748 3,704,785 3,153,171 Average stockholders' equity 1,975,420 1,769,869 1,548,182 1,373,113 1,203,415 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: Industry Ratios Return on total assets 21.5 % Return on stockholders’ equity 44.4 % Times interest earned 4.6 Instructions: Calculate three ratios for Year 1 through Year 5. Round to one decimal place. a. Return on total assets: Year 5…
Profit margin Capital intensity ratio Debt-equity ratio Net income Dividends 8.8% 49 64 -$99,000 $46,000 Based on the above information, calculate the sustainable growth rate for Northern Lights Co. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.32.16) Sustainable growth a
Solvency and Profitability Trend Analysis Addai Company has provided the following comparative information: 20Υ8 20Y7 20Υ6 20Y5 20Υ4 Net income $273,406 $367,976 $631,176 $884,000 $800,000 Interest expense 616,047 572,003 528,165 495,000 440,000 Income tax expense 31,749 53,560 106,720 160,000 200,000 Total assets (ending balance) 4,417,178 4,124,350 3,732,443 3,338,500 2,750,000 Total stockholders' equity (ending balance) 3,706,557 3,433,152 3,065,176 2,434,000 1,550,000 Average total assets 4,270,764 3,928,396 3,535,472 3,044,250 2,475,000 Average total stockholders' equity 3,569,855 3,249,164 2,749,588 1,992,000 1,150,000 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: 20Υ4-2ΟY8 Return on total assets 28% Return on stockholders' equity 18% Times interest earned 2.7 Ratio of liabilities to stockholders' equity 0.4 Required: 1.…
You have gathered this information on JJ Enterprises: 2014 2015 Sales $6.318 $7,202 COGS 3,945 4.460 Interest 303 277 Depreciation 1,204 1,196 Cash 672 418 Accounts receivables 601 578 Current liabilities 414 463 Inventory 1,215 1.598 Long-term debt 4,780 4.103 Net fixed assets 7.700 7,330 Shareholder's equity 4.994 5.358 Taxes 217 317 What is the operating cash flow for 2015? Al $1,823 B) $1.229 C) $1,367 D) $2,425 E) $1,766
Profit margin = 9.1% Capital intensity ratio = .52 Debt-equity ratio = .67 Net income = $102,000 Dividends = $50,500 Based on the above information, calculate the sustainable growth rate for Northern Lights Co. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet $ 11,760 27,450 $ 39,210 Sales Costs Taxable income Taxes (24%) Net income $19,200 13,050 $ 6,150 Sustainable growth rate 1,476 $4,674 Current assets Fixed assets Total Debt Equity % Total Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. 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.) $ 15,880 23,330 $ 39,210
None

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