The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) 2021 Assets Cash and securities $ 3,500 Accounts receivable 12,500 Inventories 14,000 Total current assets $ 30,000 Net plant and equipment 20,000 Total assets $ 50,000 Liabilities and Equity Accounts payable $ 13,650 Accruals 7,350 Notes payable 5,000 Total current liabilities $ 26,000 Long-term bonds 12,000 Total liabilities $ 38,000 Common stock 2,520 Retained earnings 9,480 Total common equity $ 12,000 Total liabilities and equity $ 50,000 Income Statement (Millions of $) 2021 Net sales $ 50,000 Operating costs except depreciation 46,500 Depreciation 1,600 Earnings before interest and taxes (EBIT) $ 1,900 Less interest 1,020 Earnings before taxes (EBT) $ 880 Taxes (25%) 220 Net income $ 660 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $231.00 Int. rate on notes payable & L-T bonds 6% Federal plus state income tax rate 25% Year-end stock price $15.84 What is the firm's current ratio? Do not round your intermediate calculations. Please explain process and calculations.
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) 2021 Assets Cash and securities $ 3,500 Accounts receivable 12,500 Inventories 14,000 Total current assets $ 30,000 Net plant and equipment 20,000 Total assets $ 50,000 Liabilities and Equity Accounts payable $ 13,650 Accruals 7,350 Notes payable 5,000 Total current liabilities $ 26,000 Long-term bonds 12,000 Total liabilities $ 38,000 Common stock 2,520 Retained earnings 9,480 Total common equity $ 12,000 Total liabilities and equity $ 50,000 Income Statement (Millions of $) 2021 Net sales $ 50,000 Operating costs except depreciation 46,500 Depreciation 1,600 Earnings before interest and taxes (EBIT) $ 1,900 Less interest 1,020 Earnings before taxes (EBT) $ 880 Taxes (25%) 220 Net income $ 660 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $231.00 Int. rate on notes payable & L-T bonds 6% Federal plus state income tax rate 25% Year-end stock price $15.84 What is the firm's current ratio? Do not round your intermediate calculations. Please explain process and calculations.
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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The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
| Balance Sheet (Millions of $) | 2021 | |||
| Assets | ||||
| Cash and securities | $ | 3,500 | ||
| Accounts receivable | 12,500 | |||
| Inventories | 14,000 | |||
| Total current assets | $ | 30,000 | ||
| Net plant and equipment | 20,000 | |||
| Total assets | $ | 50,000 | ||
| Liabilities and Equity | ||||
| Accounts payable | $ | 13,650 | ||
| Accruals | 7,350 | |||
| Notes payable | 5,000 | |||
| Total current liabilities | $ | 26,000 | ||
| Long-term bonds | 12,000 | |||
| Total liabilities | $ | 38,000 | ||
| Common stock | 2,520 | |||
| 9,480 | ||||
| Total common equity | $ | 12,000 | ||
| Total liabilities and equity | $ | 50,000 | ||
| Income Statement (Millions of $) | 2021 | |||
| Net sales | $ | 50,000 | ||
| Operating costs except |
46,500 | |||
| Depreciation | 1,600 | |||
| Earnings before interest and taxes (EBIT) | $ | 1,900 | ||
| Less interest | 1,020 | |||
| Earnings before taxes (EBT) | $ | 880 | ||
| Taxes (25%) | 220 | |||
| Net income | $ | 660 | ||
| Other data: | ||||
| Shares outstanding (millions) | 500.00 | |||
| Common dividends (millions of $) | $231.00 | |||
| Int. rate on notes payable & L-T bonds | 6% | |||
| Federal plus state income tax rate | 25% | |||
| Year-end stock price | $15.84 |
What is the firm's current ratio? Do not round your intermediate calculations.
Please explain process and calculations.
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