Question 8 Refer to the data for Pettijohn Inc. What is the firm's profit margin? Pettijohn Inc. The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. However, the firm has lease payment of $100 million in 2016. Balance Sheet (Millions of S) Assets Cash and securities Accounts receivable Inventories Total current assets Gross fixed assets Subtract: Accum. Depreciation Net fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity Income Statement (Millions of S) Net sales Operating costs except deprin Depreciation Earnings before int and taxes (EBIT) Subtract: interest expense Earnings before taxes (EBT) Taxes Net income Other data: Shares outstanding (millions) Common dividends Int rate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price 2016 $ 1,554.0 9,660.0 13,440.0 $24,654.0 $44,144.0 $25,798.0 18,346.0 $43.000.0 $ 7,980.0 6,880.0 3,620.0 $18,480.0 11,920.0 $30,400.0 3,360.0 9,240.0 $12,600.0 $43,000.0 2016 $68,800.0 $59,978.0 $ 4,029.0 $ 4,793.0 1,050.0 $ 3,743.0 $ 1.310.1 $ 2,433.0 200.00 $1,509.83 6.25% 35% $85.69
Question 8 Refer to the data for Pettijohn Inc. What is the firm's profit margin? Pettijohn Inc. The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. However, the firm has lease payment of $100 million in 2016. Balance Sheet (Millions of S) Assets Cash and securities Accounts receivable Inventories Total current assets Gross fixed assets Subtract: Accum. Depreciation Net fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity Income Statement (Millions of S) Net sales Operating costs except deprin Depreciation Earnings before int and taxes (EBIT) Subtract: interest expense Earnings before taxes (EBT) Taxes Net income Other data: Shares outstanding (millions) Common dividends Int rate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price 2016 $ 1,554.0 9,660.0 13,440.0 $24,654.0 $44,144.0 $25,798.0 18,346.0 $43.000.0 $ 7,980.0 6,880.0 3,620.0 $18,480.0 11,920.0 $30,400.0 3,360.0 9,240.0 $12,600.0 $43,000.0 2016 $68,800.0 $59,978.0 $ 4,029.0 $ 4,793.0 1,050.0 $ 3,743.0 $ 1.310.1 $ 2,433.0 200.00 $1,509.83 6.25% 35% $85.69
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
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The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Question 8
Refer to the data for Pettijohn Inc. What is the firm's profit margin?
Pettijohn Inc.
The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has
no amortization charges, none of its debt must be retired during the next 5 years, and the notes
payable will be rolled over. However, the firm has lease payment of $100 million in 2016.
Balance Sheet (Millions of S)
Assets
Cash and securities
Accounts receivable
Inventories
Total current assets
Gross fixed assets
Subtract: Accum. Depreciation
Net fixed assets
Total assets
Liabilities and Equity
Accounts payable
Notes payable
Accruals
Total current liabilities
Long-term debt
Total liabilities
Common stock
Retained earnings
Total common equity
Total liabilities and equity
Income Statement (Millions of S)
Net sales
Operating costs except deprin
Depreciation
Earnings before int and taxes (EBIT)
Subtract: interest expense
Earnings before taxes (EBT)
Taxes
Net income
Other data:
Shares outstanding (millions)
Common dividends
Int rate on notes payable & L-T bonds
Federal plus state income tax rate
Year-end stock price
○ 4.06%
○ 3.54%
○ 5.06%
○ 5.79%
5.44%
2016
$ 1,554.0
9,660.0
13,440.0
$24,654.0
$44,144.0
$25,798.0
18,346.0
$43.000.0
$7,980.0
6,880.0
3.620.0
$18,480.0
11.920.0
$30,400.0
3,360.0
9,240.0
$12,600.0
$43,000.0
2016
$68,800.0
$59,978.0
$4,029.0
$4,793.0
1,050.0
$3,743.0
$ 1.310.1
$2,433.0
200.00
$ 1,509.83
6.25%
35%
$85.69
10 pts
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