Problem set Chap. 4

# Problem set Chap. 4 - Kyle Woods Fin 315 Stendardi Problem...

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Kyle Woods Fin 315 – Stendardi Problem Set Chap. 4 P- 1-6, 10, 23 a-c 1.) DSO= Receivables/ (Annual Sales/365) 40 = X/(7300000/365) = 40 = X/20000 = (40*20000) = X X = 800000 = Accounts Receivable balance 2.) 1000/X = 2.4………….1000= 2.4X……….1000/2.4 = X X=416.67…….416.67/1000 = 41.67% 100-41.67 = 58.33 The company finances with 58.33% Debt and 41.67% equity. 3.) ROA = Net Income(10) / Total Assets(100) =10%, PM = Net Income(10)/Sales(500) = 2% ROE = Net Income(10)/Common Equity(66.67) = 15% Total Asset Turnover Ratio = Sales(500)/Total Assets(100) = 5 times Equity Multiplier = Total Assets(100)/Common Equity(66.67) = 1.499 or 1.50 times rounded 4.) Book Value per share = Common Equity/ Shares Outstanding = 6000000/800000 = 7.5 book value per share. Market/book ratio = Market Price per share/ Book value per share = 32/7.5 = 4.26 X 5.) Price/cash flow = Price Per Share/ Cash Flow Per Share = 8 = X/3……… 8*3=X….Price per share = \$24 Price Earnings = Price per share/ Earning per share = X = 24/2….Price Earnings = 12

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Problem set Chap. 4 - Kyle Woods Fin 315 Stendardi Problem...

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