Exam 3: Analyzing Financial Statements

Market Value Ratios Bree's Tennis Supply's market-to-book ratio is currently 9.4 times and PE ratio is 20 times. If Bree's Tennis Supply's common stock is currently selling at $20.50 per share, what is the book value per share and earnings per share?

These ratios measure the relationship between a firm's liquid (or current) assets and its current liabilities.

Liquidity Ratios You have the following information on Olivia's Bridle Shop: total liabilities and equity = $65 million, current liabilities = $10 million, inventory = $15 million, and quick ratio = 3 times. Using this information, what is the balance for fixed assets on Olivia's balance sheet?

Profitability Ratios PJ's Ice Cream Parlor has asked you to help piece together financial information on the firm for the most current year. Managers give you the following information: sales = $50 million, total debt = $20 million, debt ratio = 50%, and ROE = 12%. Using this information, what is PJ's ROA?

Debt Management Ratios Nicole's Neon Signs, Inc. reported a debt to equity ratio of 1.9 times at the end of 2011. If the firm's total assets at year-end are $100 million, how much of their assets is financed with equity?

Which ratio measures how many days inventory is held before the final product is sold?

All of the following are users of financial ratios except ___________.

Debt Management Ratios Calculate the times interest earned ratio for Paige's Purses, Inc. using the following information. Sales = $50,000,000, cost of goods sold = $15,000,000, depreciation expense = $2,000,000, addition to retained earnings = $10,000,000, dividends per share = $1.10, tax rate = 30%, and number of shares of common stock outstanding = 10,000,000. Paige's Purses has no preferred stock outstanding.

Asset Management and Profitability Ratios You have the following information on Universe It Ts, Inc.: sales to working capital = 10 times, profit margin = 25%, net income available to common stockholders = $3 million, and current liabilities = $1 million. What is the firm's balance of current assets?

Profitability Ratios Sue's Crops, Inc.'s 2011 income statement listed net sales = $100,000, EBIT = $20,000, net income available to common stockholders = $8,000, and common stock dividends = $2,000. The 2011 year-end balance sheet listed total assets = $400,000, and common stockholders equity = $300,000 with 3,000 shares outstanding. Calculate the profit margin, basic earnings power ratio, ROA, ROE, and dividend payout ratio.

Asset Management Ratios Rachets R Us Corp. reported sales for 2011 of $200,000. Rachets R Us listed $25,000 of inventory on its balance sheet. Using a 365-day year, how many days did Rachets R Us's inventory stay on the premises? How many times per year did Rachets R Us's inventory turn over?

This refers to the amount of debt versus equity a firm has on its balance sheet.

Market Value Ratios Lab R Doors' year-end price on its common stock is $40. The firm has a profit margin of 10%, total assets of $30 million, a total asset turnover ratio of 2, no preferred stock, and there are 4 million shares of common stock outstanding. What is the PE ratio for Lab R Doors?

A firm's year-end price on its common stock is $55. The firm has a profit margin of 6%, total assets of $75 million, a total asset turnover ratio of 0.9, no preferred stock, and 2.5 million shares of common stock outstanding. Calculate the PE ratio for the firm.

This measures the number of dollars of sales produced per dollar of fixed assets.

Profitability Ratios In 2011, Colin's Guitars, Inc. announced an ROA of 10.01%, ROE of 17.35%, and profit margin of 5.89%. The firm had total assets of $2 million at year-end 2011. Calculate the 2008 values of net income available to common stockholders', common stockholders' equity, and net sales for Colin's Guitars, Inc.

This ratio measures the overall return on the firm's assets inclusive of financial leverage and taxes.

These can be used by interested parties to identify changes in corporate performance.

A firm reported a profit margin of 8.5%, total asset turnover of 0.85 times, debt-to-equity ratio of 0.90 times, net income of $550,000, and dividends paid to common stockholders of $100,000. The firm has no preferred stock outstanding. What is the firm's internal growth rate?

DuPont Analysis Last year, DJ's Soda Fountains, Inc. reported an ROE = 27%. The firm's debt ratio was 50%, sales were $9 million, and the capital intensity ratio was 1.5 times. What is the net income for DJ's last year?