RWJ HW C3 - 1f6626a602a6127228327c9393bc2ed1e8e70ecc.doc 2....

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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. 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
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This note was uploaded on 06/10/2008 for the course BUAD 660 taught by Professor Bertrand during the Summer '08 term at Redlands.

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