Question
In: Finance
You are given the following information for Smashville, Inc. Cost of goods sold: $ 229,000 Investment...
You are given the following information for Smashville, Inc.
| Cost of goods sold: | $ | 229,000 | |
| Investment income: | $ | 2,500 | |
| Net sales: | $ | 374,000 | |
| Operating expense: | $ | 82,000 | |
| Interest expense: | $ | 7,400 | |
| Dividends: | $ | 9,000 | |
| Tax rate: | 30 | % | |
| Current liabilities: | $ | 18,000 |
| Cash: | $ | 21,000 |
| Long-term debt: | $ | 23,000 |
| Other assets: | $ | 41,000 |
| Fixed assets: | $ | 166,000 |
| Other liabilities: | $ | 5,000 |
| Investments: | $ | 45,000 |
| Operating assets: | $ | 37,000 |
During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $17,000. At the end of the year, Smashville stock sold for $54 per share. Calculate the price-book ratio, price-earnings ratio, and the price-cash flow ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Price Book Ratio_____
Price Earning ______
Price cash flow _____
Solutions
Expert Solution
| Net sales: | 374,000 | |
| Less :Cost of goods sold: | 229,000 | |
| Gross profit | 145,000 | |
| Less : Operating expense: | 82,000 | Assumed D&A is included in operating expenses |
| Operating income | 63,000 | |
| Less :Interest expense: | 7,400 | |
| Add :Investment income: | 2,500 | |
| Income before taxes | 58,100 | |
| Less : Tax (30%) | 17,430 | |
| Net income | 40,670 | |
| Shares outstanding | 17,000 | |
| Earnings per share | $ 2.39 | (Net income / shares outstanding) |
| Price Earning (P/E ) | 22.57 | ( Share price/EPS) |
| Current liabilities: | 18,000 | |
| Long-term debt: | 23,000 | |
| Other liabilities: | 5,000 | |
| Total liabilities | 46,000 | |
| Shareholders equity | 264,000 | (Total assets - total liabilities) |
| Total liabilities & shareholders equity | 310,000 | |
| Cash: | 21,000 | |
| Other assets: | 41,000 | |
| Fixed assets: | 166,000 | |
| Investments: | 45,000 | |
| Operating assets: | 37,000 | |
| Total Assets | 310,000 | |
| Book value per share | $ 15.53 | (Shareholders equity / shares outstanding) |
| Price Book Ratio (P/B) | 3.48 | ( Share price/BVPS) |
| Cash flow | 57,670 | Net income + Depreciation |
| Cash flow per share | $ 3.39 | (Cash flow / shares outstanding) |
| Price cash flow | 15.92 | ( Share price/cash flow per share) |
| Cash per share | $ 1.24 | (Cash / shares outstanding) |
| Price cash (P/C) | 43.71 | ( Share price/cash per share) |
jeff jeffy answered 6 months agoRelated Solutions
You are given the following information for Smashville, Inc. Cost of goods sold: $ 229,000 Investment...
You are given the
following information for Smashville, Inc.
Cost of goods
sold:
$
229,000
Investment
income:
$
2,500
Net sales:
$
374,000
Operating
expense:
$
82,000
Interest
expense:
$
7,400
Dividends:
$
9,000
Tax rate:
30
%
Current
liabilities:
$
18,000
Cash:
$
21,000
Long-term
debt:
$
23,000
Other
assets:
$
41,000
Fixed
assets:
$
166,000
Other
liabilities:
$
5,000
Investments:
$
45,000
Operating
assets:
$
37,000
During the year,
Smashville, Inc., had 17,000 shares of stock outstanding and...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 229,000 Investment...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$
229,000
Investment income:
$
2,500
Net sales:
$
374,000
Operating expense:
$
82,000
Interest expense:
$
7,400
Dividends:
$
9,000
Tax rate:
30
%
Current liabilities:
$
18,000
Cash:
$
21,000
Long-term debt:
$
23,000
Other assets:
$
41,000
Fixed assets:
$
166,000
Other liabilities:
$
5,000
Investments:
$
45,000
Operating assets:
$
37,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 214,000 Investment...
You are given the
following information for Smashville, Inc.
Cost of goods
sold:
$
214,000
Investment
income:
$
2,200
Net sales:
$
328,000
Operating
expense:
$
45,000
Interest
expense:
$
7,400
Dividends:
$
8,000
Tax rate:
30
%
Current
liabilities:
$
16,000
Cash:
$
21,000
Long-term
debt:
$
26,000
Other
assets:
$
38,000
Fixed
assets:
$
156,000
Other
liabilities:
$
5,000
Investments:
$
42,000
Operating
assets:
$
35,000
During the year,
Smashville, Inc., had 17,000 shares of stock outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 259,000 Investment...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$
259,000
Investment income:
$
3,100
Net sales:
$
402,000
Operating expense:
$
94,000
Interest expense:
$
7,400
Dividends:
$
11,000
Tax rate:
30
%
Current liabilities:
$
20,000
Cash:
$
21,000
Long-term debt:
$
7,000
Other assets:
$
39,000
Fixed assets:
$
134,000
Other liabilities:
$
5,000
Investments:
$
15,000
Operating assets:
$
26,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 184,000 Investment...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$
184,000
Investment income:
$
1,600
Net sales:
$
387,000
Operating expense:
$
88,000
Interest expense:
$
7,400
Dividends:
$
6,000
Tax rate:
30
%
Current liabilities:
$
12,000
Cash:
$
21,000
Long-term debt:
$
32,000
Other assets:
$
40,000
Fixed assets:
$
125,000
Other liabilities:
$
5,000
Investments:
$
36,000
Operating assets:
$
64,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 170,000 Investment...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$
170,000
Investment income:
$
3,200
Net sales:
$
308,000
Operating expense:
$
49,000
Interest expense:
$
7,400
Dividends:
$
14,000
Tax rate:
40
%
Current liabilities:
$
24,000
Cash:
$
21,000
Long-term debt:
$
6,000
Other assets:
$
40,000
Fixed assets:
$
162,000
Other liabilities:
$
5,000
Investments:
$
16,000
Operating assets:
$
51,000
Calculate the gross margin, the operating margin, return on
assets, and...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 119,000 Investment...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$
119,000
Investment income:
$
2,300
Net sales:
$
232,000
Operating expense:
$
40,000
Interest expense:
$
7,400
Dividends:
$
11,000
Tax rate:
40
%
Current liabilities:
$
18,000
Cash:
$
21,000
Long-term debt:
$
25,000
Other assets:
$
39,000
Fixed assets:
$
126,000
Other liabilities:
$
5,000
Investments:
$
43,000
Operating assets:
$
45,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 184,000 Investment...
You are given the following information for Smashville,
Inc.
Cost of goods sold:
$
184,000
Investment income:
$
1,600
Net sales:
$
387,000
Operating expense:
$
88,000
Interest expense:
$
7,400
Dividends:
$
6,000
Tax rate:
30
%
Current liabilities:
$
12,000
Cash:
$
21,000
Long-term debt:
$
32,000
Other assets:
$
40,000
Fixed assets:
$
125,000
Other liabilities:
$
5,000
Investments:
$
36,000
Operating assets:
$
64,000
During the year, Smashville, Inc., had 25,000 shares of stock
outstanding and...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 175,000 Investment...
You are given the following information for Smashville,
Inc.
Cost of goods sold:
$
175,000
Investment income:
$
2,800
Net sales:
$
237,000
Operating expense:
$
42,000
Interest expense:
$
7,400
Dividends:
$
10,000
Tax rate:
30
%
Current liabilities:
$
18,000
Cash:
$
21,000
Long-term debt:
$
10,000
Other assets:
$
36,000
Fixed assets:
$
89,000
Other liabilities:
$
5,000
Investments:
$
12,000
Operating assets:
$
24,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding and...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 169,000 Investment...
You are given the following information for Smashville,
Inc.
Cost of goods sold:
$
169,000
Investment income:
$
1,300
Net sales:
$
282,000
Operating expense:
$
44,000
Interest expense:
$
7,400
Dividends:
$
5,000
Tax rate:
30
%
Current liabilities:
$
22,000
Cash:
$
21,000
Long-term debt:
$
92,000
Other assets:
$
37,000
Fixed assets:
$
120,000
Other liabilities:
$
6,000
Investments:
$
33,000
Operating assets:
$
64,000
During the year, Smashville, Inc., had 20,000 shares of stock
outstanding and...
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