(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $446,000, with a cost of goods sold of $110,000. The firm's operating expenses were $126,000, and its increase in retained earnings was $99,060. There are currently 24,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin.

(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $446,000, with a cost of goods sold of $110,000. The firm's operating expenses were $126,000, and its increase in retained earnings was $99,060. There are currently 24,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin.

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

See similar textbooks

Similar questions

KBJ has total assets of S613,000. There are 21,000 shares of stock outstanding with a market value of S13 a share. The firm has a profit margin of 6.2 percent and a total asset turnover of 1.08. What is the price-earnings ratio?
The Lory Company had net earnings of $127,000 this past year. Dividends of $38,100 were paid. The company's equity was $1,587,500. If Lory has 100,000 shares outstanding with a current market price of $11.625 per share, and a dividend growth rate is 5.6%, what is the firm's discount rate?
Futuristic Development (FD) generated $2 million in sales last year with assets equal to $5 million. The firm operated at full capacity last year. According to FD's balance sheet, the only current liabilities are accounts payable, which equals $460,000. The only other liability is long-term debt, which equals $730,000. The common equity section is comprised of 500,000 shares of common stock with a book value equal to $3 million and $810,000 of retained earnings. Next year, FD expects its sales will increase by 22 percent. The company's net profit margin is expected to remain at its current level, which is 16 percent of sales. FD plans to pay dividends equal to $0.60 per share. It also plans to issue 70,000 shares of new common stock, which will raise $460,000. Estimate the additional funds needed (AFN) to achieve the forecasted sales next year. Round your answer to the nearest dollar.
(Related to Checkpoint 4.3) (Profitability analysis) Last year the P. M. Postem Corporation had sales of $405,000, with a cost of goods sold of $112,000. The firm's operating expenses were $125,000, and its increase in retained earnings was $76,440. There are currently 21,000 shares of common stock outstanding, the firm pays a $1.56 dividend per share, and the firm has no interest-bearing debt. a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's income statement. b. Compute the firm's operating profit margin. a. Assuming the firm's earnings are taxed at 35%, construct the firm's income statement. Complete the income statement below: (Round to the nearest dollar.) Income Statement Revenues Cost of Goods Sold Gross Profit Operating Expenses Net Operating Income Interest Expense Earnings before Taxes Income Taxes Net Income GA SA ...
Use the information below to build a properly formatted income statement. A: The firm has 25,280,000 shares outstanding and its earnings per share is $2.40. Calculate Net Income. B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's operating income is 1.80 times its Net Income. Determine the firm's EBIT. E: Given your answer to D, calculate the firm's Interest Expense. F: After completing the above: Gross Profit is 18.00 times its Interest Expense. Calculate Gross Profit. G: Finally, the firm's Revenue is 1.50 times its EBIT. Calculate the firm's Revenue. INSTRUCTIONS: Write ratios involving dollar amounts out to the penny, with no dollar sign: 1000.00. All ratios and interest rates should be calculated as follows: 11.28 (no percent sign) For this problem: Net Income = Earnings before Taxes = Тах еxpens 3 Earnings before Taxes & Interest = Interest expense = Gross profit = Revenue =
A company had total revenues of $59 million, operating margin of 35.1%, and depreciation and amortization expense of $13 million over the trailing twelve months. The company currently has $280 million in total debt and $116 million in cash and cash equivalents. The company's shares are currently trading at $33.2 per share and there are 13 million shares outstanding. What is its EV/EBITDA ratio? Round to one decimal place.
At last year’s end, total assets for Roberts Inc. were $1.2 million and accounts payable were $375,000. Sales, which last year were $2.5 million, are expected to increase by 25 percent this year. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Robert Inc. typically uses no current liabilities other than accounts payable. Common stock amounted to $425,000 last year, and retained earnings were $295,000. Roberts Inc. plans to sell new common stock in the amount of $75,000. The Firm’s profit margin on sales is 6 percent; and 60 percent of earnings will be retained. Set up Roberts Inc.’s last year balance sheet, to the extent possible, based on the information provided in this problem. Based on the balance sheet setup in Part a above, determine how much was Roberts Inc.’s long-term debt last year? Perform financial forecasting using percent of sales method (i.e., constant ratio method; do not use the AFN Equation) to determine how much…
Use the information below to build a properly formatted income statement. A: The firm has 12,640,500 shares outstanding and EPS is $3.20.Calculate Net Income . B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's Revenue is $183,600,000 and its operating margin is 45.00%. Calculate EBIT. E: After completing the above: Gross Profit is 1.65 times its EBIT . Calculate Gross Profit . F: Given the above information, calculate the firm's Operating Expenses . G: Given the above information, calculate the firm's Interest Expense .
Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total bookvalue of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a totalasset turnover of 1.5. Calculate the company’s EPS?
Last year, your company had sales of $11,010,980. The firm's costs of goods sold amounted to 60% of sales. The firm also paid cash operating expenses of $1,000,000, and had $173,511 in depreciation expense. The firm had $450,000 in 9% coupon bonds outstanding and paid $40,000 in dividends to its common stockholders. Also, the firm received $100,000 in dividend income from its holdings of other common stocks. Compute the corporation's taxable income i.e. earnings before taxes. SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN ROUND TO THE NEAREST WHOLE NUMBER AT THE END. DO NOT ENTER THE $ SIGN SYMBOL..i.e. if your answer is 1,000,000 enter it as 1,000,000.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS