Question

Two music companies reported the following in their financial statements: Urban Youth Sound Jonx 2015 2014...

Two music companies reported the following in their financial statements:


Urban Youth

Sound Jonx

2015 2014 2015 2014
  Net income $ 26,800 $ 23,602 $ 44,000 $ 36,039
  Total stockholders' equity 317,101 230,399 446,302 451,198
  Earnings per share 1.10 1.00 0.95 0.85
  Stock price when annual results reported 16.85 15.00 12.65 10.95


Required:
1-a.

Compute the 2015 ROE for each company. (Round your answers to 1 decimal place.)

ROE %
Urban Youth
Sound Jonx
1-b.

Which company appears to generate greater returns on stockholders’ equity in 2015?

Urban Youth
Sound Jonx
Or Both Companies appear to generate the same return on equity


2-a.

Compute the 2015 P/E ratio for each company. (Round your answers to 1 decimal place.)

P/E Ratio
Urban Youth ___________________times
Sound Jonx ____________________times
2-b.

Which company investors appear to value more?

Sound Jonx
Urban Youth

Homework Answers

Answer #1
  • All working forms part of the answer
  • Requirement 1

Working

Urban Youth

Sound jonx

A

Net Income

$26,800

$44,000

B

Total Stockholders' Equity

$317,101

$446,302

C=A/B

ROE for 2015 [Answer (a)

8.5%

9.9%

Answer (b)

Sound Jonx Company appears to generate greater returns on stockholders’ equity

  • Requirement 2

Working

Urban Youth

Sound jonx

A

Stock price

$16.85

$12.65

B

EPS

$1.1

$0.95

C=A/B

P/E Ratio

15.3 times

13.3 times

Answer (b) Urban Youth Company’s Investors appear to value More.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
General Mills reported the following information in its 2015 financial statements ($ in millions): 2015 2014...
General Mills reported the following information in its 2015 financial statements ($ in millions): 2015 2014 Balance Sheets: Accounts receivable, net $ 1,386.7 $ 1,483.6 2015 Income statement: Sales revenue $ 17,630.3 A note disclosed that the allowance for uncollectible accounts had a balance of $25.3 million and $21.0 million at the end of 2015 and 2014, respectively. Bad debt expense for 2015 was $19.8 million. Required: Determine the amount of cash collected from customers during 2015. (All sales are...
Great Lakes ​Manufacturing, Inc., reported the following at December​ 31, 2014 and December​ 31, 2015​: Stockholders'...
Great Lakes ​Manufacturing, Inc., reported the following at December​ 31, 2014 and December​ 31, 2015​: Stockholders' Equity -Preferred stock, cumulative, $0.50 par, 10%, 90,000 shares issues $45,00 -Common stock, $0.10 par, 9,090,000 shares issued 909,000 Great Lakes Manufacturing has paid all preferred dividends through 2011. Requirement: 1. Compute the total amounts of dividends to both preferred and common stockholders for 2014 and 2015 if total dividends are $90,000 in 2014 and $108,000 in 2015. Begin with 2014. Compute the total...
J. Bartley Pools Inc. reported the following in its financial statements for the quarter ended March...
J. Bartley Pools Inc. reported the following in its financial statements for the quarter ended March 31, 2014. December 31, 2013 March 31, 2014   Common shares (no par value; 55,000 shares outstanding) $ 55,000 $ 55,000   Contributed surplus 32,500 32,500   Retained earnings 22,500 22,500     Total shareholders' equity $ 110,000 $ 110,000 During the quarter ended March 31, 2014, Bartley reported Net Income of $8,250 and declared and paid cash dividends totalling $8,250. Required: 1. Calculate earnings per share (EPS) and...
Using the financial statements for the fiscal year 2015 you will analyze the performance of each...
Using the financial statements for the fiscal year 2015 you will analyze the performance of each toy company individually and also compare the performance of the two companies against each other. You will perform your analyses by answering the 13 questions on page 2. Answers to the 13 questions must be provided on pages 3 and 4 and submitted by the due date. Show all calculations for your answers on an attachment to your answer sheets. No partial credit can...
Freeman, Inc., reported the following financial statements for the last two years. 2014 Income Statement   Sales...
Freeman, Inc., reported the following financial statements for the last two years. 2014 Income Statement   Sales $ 565,210   Cost of goods sold 274,020   Selling & administrative 124,732     Depreciation 54,575   EBIT $ 111,883   Interest 19,297     EBT $ 92,586   Taxes 48,145   Net income $   44,441     Dividends $ 9,700   Addition to retained earnings $ 34,741 FREEMAN, INC. Balance Sheet as of December 31, 2013   Cash $ 13,330    Accounts payable $ 24,010   Accounts receivable 18,993       Inventory 13,795   Current assets $ 46,118    Long-term debt...
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized...
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data:     2015 2014   Income statement:   Sales revenue $ 190,600 * $ 168,300   Cost of goods sold 112,700 101,300      Gross profit 77,900 67,000   Operating expenses and interest expense 56,700 53,700      Pretax income 21,200 13,300   Income tax 7,800 3,900      Net income $ 13,400 $ 9,400      Balance sheet:   Cash $ 4,600 $ 5,700   Accounts receivable (net) 14,500 17,300   Inventory 40,900 32,400   Operational...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC Balance Sheet as of December 31, 2015 and 2014 (in millions of dollars) 2015       2014           2015       2014 Assets                           Liabilities and Equity                   Current assets:                           Current liabilities:                   Cash and marketable securities   $   45       $   36       Accrued wages and taxes   $  ...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC Balance Sheet as of December 31, 2015 and 2014 (in millions of dollars) 2015 2014 2015 2014   Assets   Liabilities and Equity   Current assets:   Current liabilities:      Cash and marketable securities $ 44 $ 42      Accrued wages and taxes $ 28 $ 30      Accounts receivable 36 36      Accounts payable 32 36      Inventory 153 63      Notes payable 36 42         Total $ 233 $ 141         Total $ 96...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC...
Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC Balance Sheet as of December 31, 2015 and 2014 (in millions of dollars) 2015 2014 2015 2014   Assets   Liabilities and Equity   Current assets:   Current liabilities:      Cash and marketable securities $ 44 $ 42      Accrued wages and taxes $ 28 $ 30      Accounts receivable 36 36      Accounts payable 32 36      Inventory 153 63      Notes payable 36 42         Total $ 233 $ 141         Total $ 96...
Problem 13-23A Ratio analysis LO 13-2, 13-3, 13-4, 13-5 The following financial statements apply to Robin...
Problem 13-23A Ratio analysis LO 13-2, 13-3, 13-4, 13-5 The following financial statements apply to Robin Company. 2015 2014   Revenues        Net sales $ 210,100 $ 176,300        Other revenues 9,000 6,300   Total revenues 219,100 182,600   Expenses        Cost of goods sold 125,900 102,800        Selling expenses 20,300 18,300        General and administrative expenses 10,400 9,400        Interest expense 1,800 1,800        Income tax expense 19,200 16,300   Total expenses 177,600 148,600   Earnings from continuing operations      before extraordinary items 41,500 34,000   Extraordinary gain (net of $1,800 tax) 2,100...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT