WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2019 $1,041 2020 2018 $ 805 $ 903 Current assets Other assets 2,430 1,937 1,736 Total assets $3,235 $2,978 $2,639 Current liabilities $ 847 $ 749 2$ 1,617 1,024 594 2$ $4 Long-term liabilities Stockholders' equity 1,088 1,043 955 935 Total liabilities and stockholders' equity $3,235 $2,978 $2,639 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: Sales $3,067 $2,930 Operating income Interest expense 313 327 101 82 Net income 242 237 Other data: Average number of common shares outstanding Total dividends paid 43.0 48.4 $ 67.0 $ 54.0 Required: a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. b. Calculate return on equity for 2020 and 2019. c. Calculate working capital and the current ratio for each of the past three years. d. Calculate earnings per share for 2020 and 2019. e. If Wiper's stock had a price/earnings ratio of 13 at the end of 2020, what was the market price of the stock? f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. g. Calculate the dividend payout ratio for 2020. h. Assume that accounts receivable at December 31, 2020, totaled $326 million. Calculate the number of days' sales in receivables at that date. i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. j. Calculate the times interest earned ratio for 2020 and 2019. a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. (Do not round intermediate calculations. Round your answers to 1 decimal place.) b. Calculate return on equity for 2020 and 2019. (Round your answers to 1 decimal place.) 2020 7.8 % 2019 Return on investment 8.4 % a. b. Return on equity
WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2019 $1,041 2020 2018 $ 805 $ 903 Current assets Other assets 2,430 1,937 1,736 Total assets $3,235 $2,978 $2,639 Current liabilities $ 847 $ 749 2$ 1,617 1,024 594 2$ $4 Long-term liabilities Stockholders' equity 1,088 1,043 955 935 Total liabilities and stockholders' equity $3,235 $2,978 $2,639 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: Sales $3,067 $2,930 Operating income Interest expense 313 327 101 82 Net income 242 237 Other data: Average number of common shares outstanding Total dividends paid 43.0 48.4 $ 67.0 $ 54.0 Required: a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. b. Calculate return on equity for 2020 and 2019. c. Calculate working capital and the current ratio for each of the past three years. d. Calculate earnings per share for 2020 and 2019. e. If Wiper's stock had a price/earnings ratio of 13 at the end of 2020, what was the market price of the stock? f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. g. Calculate the dividend payout ratio for 2020. h. Assume that accounts receivable at December 31, 2020, totaled $326 million. Calculate the number of days' sales in receivables at that date. i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. j. Calculate the times interest earned ratio for 2020 and 2019. a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. (Do not round intermediate calculations. Round your answers to 1 decimal place.) b. Calculate return on equity for 2020 and 2019. (Round your answers to 1 decimal place.) 2020 7.8 % 2019 Return on investment 8.4 % a. b. Return on equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Only need help with part B
Transcribed Image Text:WIPER INC.
Condensed Balance Sheets
December 31, 2020, 2019, 2018
(in millions)
2019
$1,041
2020
2018
$ 805
$ 903
Current assets
Other assets
2,430
1,937
1,736
Total assets
$3,235
$2,978
$2,639
Current liabilities
$ 847
$ 749
2$
1,617
1,024
594
2$
$4
Long-term liabilities
Stockholders' equity
1,088
1,043
955
935
Total liabilities and stockholders' equity
$3,235
$2,978
$2,639
WIPER INC.
Selected Income Statement and Other Data
For the year Ended December 31, 2020 and 2019
(in millions)
2020
2019
Income statement data:
Sales
$3,067
$2,930
Operating income
Interest expense
313
327
101
82
Net income
242
237
Other data:
Average number of common shares outstanding
Total dividends paid
43.0
48.4
$ 67.0
$ 54.0
Required:
a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
b. Calculate return on equity for 2020 and 2019.
c. Calculate working capital and the current ratio for each of the past three years.
d. Calculate earnings per share for 2020 and 2019.
e. If Wiper's stock had a price/earnings ratio of 13 at the end of 2020, what was the market price of the stock?
f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
g. Calculate the dividend payout ratio for 2020.
h. Assume that accounts receivable at December 31, 2020, totaled $326 million. Calculate the number of days' sales in receivables at
that date.
i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
j. Calculate the times interest earned ratio for 2020 and 2019.
Transcribed Image Text:a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. (Do not round
intermediate calculations. Round your answers to 1 decimal place.)
b. Calculate return on equity for 2020 and 2019. (Round your answers to 1 decimal place.)
2020
7.8 %
2019
Return on investment
8.4 %
a.
b. Return on equity
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