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Q.333 The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the...

Q.333 The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the following financial information. The Company has asked you to make an analysis of the firm’s financial condition. In addition to the information given below, you have been informed that the firm has no lease payments but has principal payments of $2 million per year on its Long-term debt. Endot uses a 365-day year in preparing its ratios. Endot has 5,000,000 common shares outstanding. Endot’s financial statements are as follows:

Balance Sheet as of December 31, 2014 (Millions of Dollars)

Cash

45

Accounts Payable

45

Marketable Securities

33

Notes Payable

45

Accounts Receivable

66

Other Current Liabilities

21

Inventory

159

Total Current Liabilities

111

Total Current Assets

303

Total Long Term Liabilities

24

Total Liabilities

135

Gross Fixed Assets

225

Less Depreciation

78

Common Stock

114

Net Fixed Assets

147

Retained Earnings

201

Total Shareholder Equity

315

Total Assets

450

Total Liabilities and Equity

450

Statement of Income and Expenses for Year Ended December 31, 2014 (Millions of Dollars)

Net Sales

795.0

Costs of Goods Sold

660.0

Gross Profit

135.0

Fixed Expense

73.5

EBITDA

61.5

Depreciation Expense

12.0

EBIT

49.5

Interest Expense

4.5

EBT

45.0

Taxes (40%)

18.0

Net Income

27.0

What was Endot's Quick (Acid Test) Ratio?

a. 0.37

b. 1.30

c. 1.73

d. 2.00

e. 2.73

Q 388 The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the following financial information. The Company has asked you to make an analysis of the firm’s financial condition. In addition to the information given below, you have been informed that the firm has no lease payments but has principal payments of $2 million per year on its Long-term debt. Endot uses a 365-day year in preparing its ratios. Endot has 5,000,000 common shares outstanding. Endot’s financial statements are as follows:

Balance Sheet as of December 31, 2014 (Millions of Dollars)

Cash

45

Accounts Payable

45

Marketable Securities

33

Notes Payable

45

Accounts Receivable

66

Other Current Liabilities

21

Inventory

159

Total Current Liabilities

111

Total Current Assets

303

Total Long Term Liabilities

24

Total Liabilities

135

Gross Fixed Assets

225

Less Depreciation

78

Common Stock

114

Net Fixed Assets

147

Retained Earnings

201

Total Shareholder Equity

315

Total Assets

450

Total Liabilities and Equity

450

Statement of Income and Expenses for Year Ended December 31, 2014 (Millions of Dollars)

Net Sales

795.0

Costs of Goods Sold

660.0

Gross Profit

135.0

Fixed Expense

73.5

EBITDA

61.5

Depreciation Expense

12.0

EBIT

49.5

Interest Expense

4.5

EBT

45.0

Taxes (40%)

18.0

Net Income

27.0

If Endot's common stock is currently selling for $104.49 per share, what is Endot's Price to Earnings Ratio?

a.

580.5X

b.

104.49X

c.

41.8X

d.

19.35X

e.

It is impossible to determine the P/E ratio from the information given

Expert Solution

jeff jeffy answered 1 month ago

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