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RWJ HW C3

# RWJ HW C3 - 2 We need to find net income first So Profit...

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1f6626a602a6127228327c9393bc2ed1e8e70ecc.doc 2. We need to find net income first. So: Profit margin = Net income / Sales Net income = Sales(Profit margin) Net income = (\$28,000,000)(0.08) = \$1,920,000 ROA = Net income / TA = \$1,920,000 / \$18,000,000 = .1067 or 10.67% B-18 SOLUTIONS To find ROE, we need to find total equity. TL & OE = TD + TE TE = TL & OE – TD TE = \$18,000,000 – 7,000,000 = \$11,000,000 ROE = Net income / TE = \$1,920,000 / \$11,000,000 = .1745 or 17.45% 6. Net income = Addition to RE + Dividends = \$350,000 + 160,000 = \$510,000 Earnings per share = NI / Shares = \$510,000 / 210,000 = \$2.43 per share Dividends per share = Dividends / Shares = \$160,000 / 210,000 = \$0.76 per share Book value per share = TE / Shares = \$4,100,000 / 210,000 = \$19.52 per share Market-to-book ratio = Share price / BVPS = \$58 / \$19.52 = 2.97 times P/E ratio = Share price / EPS = \$58 / \$2.43 = 23.88 times Sales per share = Sales / Shares = \$3,900,000 / 210,000 = \$18.57 P/S ratio = Share price / Sales per share = \$58 / \$18.57 = 3.12 times 10. Payables turnover = COGS / Accounts payable Payables turnover = \$21,587 / \$5,832 = 3.70 times Days’ sales in payables = 365 days / Payables turnover Days’ sales in payables = 365 / 3.70 = 98.61 days The company left its bills to suppliers outstanding for 98.61 days on average. A large value for this

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