Question

The balance sheet and income statement shown below are for Koski Inc. Note that the firm...

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 $)
Assets

2016

Cash and securities

$2,145

Accounts receivable

8,970

Inventories

12,480

Total current assets

$23,595

Net plant and equipment

$15,405

Total assets

$39,000

Liabilities and Equity
Accounts payable

$7,410

Accruals

4,290

Notes payable

5,460

Total current liabilities

$17,160

Long-term bonds

$7,800

Total liabilities

$24,960

Common stock

$5,460

Retained earnings

8,580

Total common equity

$14,040

Total liabilities and equity

$39,000

Income Statement (Millions of $) 2016
Net sales

$58,500

Operating costs except depreciation

54,698

Depreciation

1,024

Earnings before interest and taxes (EBIT)

$2,779

Less interest

829

Earnings before taxes (EBT)

$1,950

Taxes

683

Net income

$1,268

Other data:
Shares outstanding (millions)

500.00

Common dividends (millions of $)

$443.63

Int rate on notes payable & L-T bonds

6.25%

Federal plus state income tax rate

35%

Year-end stock price

$30.42

Answer the following questions:

1. What is the firm's days sales outstanding? Assume a 365-day year for this calculation. Do not round your intermediate calculations.

2. What is the firm's inventory turnover ratio? Do not round your intermediate calculations.

3. What is the firm's total debt to total capital ratio? Do not round your intermediate calculations.

4. What is the firm's ROE? Do not round your intermediate calculations.

5. What is the firm's profit margin? Do not round your intermediate calculations.

6. What is the firm's operating margin? Do not round your intermediate calculations.

7. What is the firm's EPS? Do not round your intermediate calculations.

Homework Answers

Answer #1
1) Days sales outstanding = AR * 365 / Sales = 8970*365/58500 = 56 days
2) Inventory turnover ratio = Operating cost / closing inventory = 54698/12480 = 4.383 times
3) Total Debt to total capital ratio = Total liabilities/Total Common Eq = 24960/14040 = 1.777 times
4) ROE = NI / Total Common Eq. = 1268/14040 = 9.03%
5) Profit Margin = NI / Sales = 1268/58500 = 2.17%
6) Operating margin = EBIT / Sales = 2779/58500 = 4.75%
7) EPS = NI / Number of Common shares = 1268 / 500 = $2.536 per share
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
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
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 $) Assets 2016 Cash and securities $2,145 Accounts receivable 8,970 Inventories 12,480 Total current assets $23,595 Net plant and equipment $15,405 Total assets $39,000 Liabilities and Equity Accounts payable $7,410...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
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 $) Assets 2016 Cash and securities $2,145 Accounts receivable 8,970 Inventories 12,480 Total current assets $23,595 Net plant and equipment $15,405 Total assets $39,000 Liabilities and Equity Accounts payable $7,410...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
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 $) Assets 2019 Cash and securities $4,200 Accounts receivable 17,500 Inventories 20,300 Total current assets $42,000 Net plant and equipment $28,000 Total assets $70,000 Liabilities and Equity Accounts payable $27,531...
Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that...
Exhibit 4.1 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 $)   Assets      2018 Cash and securities      $3,000 Accounts receivable      15,000 Inventories      18,000 Total current assets      $36,000 Net plant and equipment      $24,000 Total...
Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that...
Exhibit 4.1 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 $) Assets 2018 Cash and securities $3,000 Accounts receivable 15,000 Inventories 18,000 Total current assets $36,000 Net plant and equipment $24,000 Total assets $60,000 Liabilities and Equity Accounts...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
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 $)   Assets      2018 Cash and securities      $3,000 Accounts receivable      15,000 Inventories      18,000 Total current assets      $36,000 Net plant and equipment      $24,000 Total assets     ...
QUESTION 8 The balance sheet and income statement shown below are for Koski Inc. Note that...
QUESTION 8 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 $) Assets 2016 Cash and marketable securities $2,245 Accounts receivable 9,870 Inventories 10,480 Total current assets $22,595 Net plant and equipment $65,405 Total assets $88,000 Liabilities and Equity...
The balance sheet and income statement shown below. Note that the firm has no amortization charges,...
The balance sheet and income statement shown below. 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 $) Assets 2019 Cash and securities $ 2,500 Accounts receivable 11,500 Inventories 16,000 Total current assets $30,000 Net plant and equipment $20,000 Total assets $50,000 Liabilities and Equity Accounts payable $ 9,500 Accruals 5,500...
The balance sheet and income statement shown below are for James Madison Inc. Note that the...
The balance sheet and income statement shown below are for James Madison 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. (SHOW YOUR WORK) Balance Sheet (Millions of $) Assets 2019 Cash and securities $ 1,554.0 Accounts receivable 9,660.0 Inventories 13,440.0 Total current assets $24,654.0 Net plant and equipment 17,346.0 Total assets $42,000.0 Liabilities...
The balance sheet and income statement shown below are for Big D Café: Balance Sheet (millions...
The balance sheet and income statement shown below are for Big D Café: Balance Sheet (millions of $) Assets Cash and securities                                                          2,500 Accounts receivable                                                        11,500 Inventories                                                                        16,000 Total current assets                                                        30,000 Net plant and equipment                                             20,000 Total assets 50,000 Liabilities and Equity Accounts payable                                                             9,500 Notes payable                                                                   7,000 Accruals                                                                               5,500 Total current liabilities                                                    22,000 Long-term debt                                                                15,000 Total liabilities                                                                   37,000 Common stock                                                                  2,000 Retained earnings                                                            11,000 Total common equity                                                     13,000 Total liabilities and equity                                            50,000 Income Statement (millions of $) Sales                                                                                      87,500 Operating costs except...