Bigco’s balance sheet one year ago indicated retained earnings of $450 million. This year, Bigco’s net income was $35 million. It paid its preferred shareholders a dividend of $5 million and its common shareholders a regular dividend of $6 million and a special one time-dividend of $10 million. What should be the retained earnings amount on this year’s balance sheet?
This is from chapter 3 of your text.
Recalculate Coca-Cola’s return on equity for both 2000 and 2001 as product of the gross margin, asset turnover, and financial leverage ratios. On the basis of this analysis discuss why Coca-Cola’s return on equity increased between 2000 and 2001.
What is the sustainable growth rate of a firm with a profit margin (net income to sales) of 5 percent , an asset turnover ratio (sales to assets) f 3.1 a financial leverage ratio (assets to equity) of 1.5, and a dividend payout ratio of .4.?
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