Question

Solve in excel plz and show work

Financial Statements

ABC CORPORATION

Balance Sheet

Year Ended December 31 (in $ millions)

Assets	2006	2005		Liabilities & Stockowner’s Equity	2006	2005
Current Assets				Current Liabilities
Cash	22.2	19.5		Accounts Payable	29.2	24.5
Accounts Receivables	18.5	13.2		Notes Payable / Short-Term Debt	4.5	3.2
Inventories	14.2	14.3		Current Maturities of Long-Term Debt	13.3	12.3
Other Current Assets	2.0	1.0		Other Current Liabilities	3.0	4.0
Total Current Assets	56.9	48.0		Total Current Liabilities	50.0	45.0
Long Term Assets				Long-Term Liabilities
Land	22.2	20.7		Long-Term Debt	98.9	56.3
Buildings	36.5	30.5		Capital Lease Obligations	---	---
Equipment	39.7	33.2		Total Debt	98.9	56.3
Less Accumulated Depreciation	(18.7)	(17.5)		Deferred Taxes	7.6	7.4
Net Property, Plant, and Equipment	79.7	66.9		Other Long-Term Liabilities	----	----
Goodwill	22.0	---		Total Long Term Liabilities	106.5	63.7
Other Long-Term Assets	21.0	14.0		Total Liabilities	156.5	108.7
Total Long Term Assets	122.7	80.9		Stockholder’s Equity	23.1	20.2
Total Assets	179.6	128.9		Total Liabilities and Stockholder’s Equity	179.6	128.9

ABC Corporation

Income Statement

Year Ended December 31 ($ in millions)

	2006	2005
Total Sales	188.8	176.1
Cost of Sales	(153.4)	(147.3)
Gross Profit	35.4	28.8
Selling, General and Administration Expenses	(13.5)	(13.0)
Research and Development	(9.2)	(7.6)
Depreciation and Amortization	(2.2)	(1.1)
Operating Income	10.5	7.1
Other Income	----	----
Earnings Before Interest and Tax (EBIT)	10.5	7.1
Interest Income (or Expense)	(7.7)	(4.6)
Pretax Income	2.8	2.5
Taxes	(0.7)	(0.6)
Net Income	2.1	1.9
Earnings per share	$0.556	$0.528
Diluted Earnings Per Share	$0.526	$0.500

ABC Corporation has 3.8 million shares outstanding and shares are trading for $15

Calculate the following for 2005. – (30PTS, Two Points Each)

Quick Ratio

Current Ratio

Market to Book Ratio

Debt to Equity Ratio

Enterprise Value

EPS

Operating Margin

Net Profit Margin

Return on Equity

P/E Ratio

Inventory Turnover

Days of Sales Outstanding

ROA

ROE

Did the tax rate increase from 2005 to 2006? If so, by how much?

Answer 1

Quick ratio = Current asset less inventories /Current liability

=48-14.3/45

=33.7/45

=0.749

Current ratio = current asset/current laibility

=48/45

=1.067

Market to Book Ratio = Market price per share/Book price per share

=15/(20.2/3.8)

=15/5.316

=2.822$

Debt to Equity Ratio = Debt/equity

= 56.3+12.3+3.2 / 20.2

=71.8/20.2

=3.55

Enterprise Value = Market value of equity+ Debt -cash

=(3.8*15) + 71.8 - 19.5

=57+71.8-19.5

=109.3 million

EPS = 0.528$

Operating Margin = EBIT/Sales

=7.1/176.1

=4.03%

Net Profit Margin = Net profit/sales

=1.9/176.1

1.078%

Return on Equity=profit/equity

=1.9/20.2

=9.4%

P/E Ratio = MPS/EPS

=15/0.528

=28.41

Inventory Turnover = inventory/sales*365

=14.3/176.1 * 365

=29.64 days

ROA = PAT/Asset

=1.9/128.9

1.47%

Yes, income tax rate has increased from 24%(0.6/2.5) to 25% (0.7/2.8). Thus it has increased by 1%