Question

In: Accounting

Consider the following data. I/S 2015 2016 Sales (S) 1,200 1,320 (+10%) - Costs (C) (COGS...

  1. Consider the following data.

I/S

2015

2016

Sales (S)

1,200

1,320 (+10%)

- Costs (C) (COGS &  SG&A)

1,000

= EBITDA (=EBIT)

200

- Interest

20

=EBT

180

- Tax (T)

40

=      NI

140

  • Dividend

40

  • Plowback

100

B/S

Assets (A)

2,000

Debt (D)

800

Equity (E)

1,200

  • Common stock (CS)

           800

  • Retained earnings (RE)                

400(+100)

From these data, calculate the following ratios, showing all work:

Margin (Cost) =

Turnover (TO) =

Interest Rate =

Tax Rate =

Leverage =

Assume that depreciation is included in “Costs”. Using these ratios, calculate the I/S and B/S for 2016.

Assume that the leverage remains constant (at 0.40).

Assume the common stock remains constant (at 800), that is no new common stock is issued.

  1. Using these data, calculate the cash flow to be discounted (CF) for 2016.
  2. Assuming that this CF increases by 10% per year indefinitely, what is the value of the company? (Use a discount rate (r) of 15%)
  3. What is the dividend paid during 2016? What is the dividend yield? What is retained earnings (RE) at the end of 2016?

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

The Murdock Corporation reported the following balance sheet data for 2016 and 2015: 2016 2015 Cash...
The Murdock Corporation reported the following balance sheet data for 2016 and 2015: 2016 2015 Cash $ 80,705 $ 24,755 Available-for-sale securities (not cash equivalents) 17,000 88,000 Accounts receivable 83,000 70,950 Inventory 168,000 147,700 Prepaid insurance 1,770 2,300 Land, buildings, and equipment 1,256,000 1,128,000 Accumulated depreciation (613,000 ) (575,000 ) Total assets $ 993,475 $ 886,705 Accounts payable $ 79,040 $ 151,670 Salaries payable 21,200 26,000 Notes payable (current) 27,700 78,000 Bonds payable 203,000 0 Common stock 300,000 300,000 Retained...
Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1 10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K...
Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1 10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K USD ($) $ in Millions MAR 2016 10-K Report MAR 2015 10-K Report Choice percent change from 2015 to 2016 Marriott percent change from 2015 to 2016 Account Name 2016 10-K 2015 10-K Account Name 2016 10-K 2015 10-K Choice Marriott ASSETS ASSETS Current assets Current assets Cash and cash equivalents $                      202,463.00 $                      193,441.00 Cash and equivalents $                       858,000.00 $                         96,000.00 Receivables (net...
Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1 10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K...
Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1 10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K MAR 2016 10-K Report MAR 2015 10-K Report Choice percent change from 2015 to 2016 Marriott percent change from 2015 to 2016 Account Name 2016 10-K 2015 10-K Account Name 2016 10-K 2015 10-K Choice Marriott CASH FLOWS FROM OPERATING ACTIVITIES OPERATING ACTIVITIES OPERATING ACTIVITIES Net income $                      139,371.00 $                      128,029.00 Net income $                             780,000 $                             859,000 Net income 9% -9% Adjustments to reconcile...
The Following Java expression: S/10 * 10 + 10 – S = C Show that this...
The Following Java expression: S/10 * 10 + 10 – S = C Show that this expression gives a value of 2 when S contains the int value 78. You must show every step in your working, performing exactly one operation on each line. I have tried to no end to make sense of this and I know there is an order of precedence in the operators but I can't make any sense of it. Could someone please explain this...
1. Consider a stock with the following return information for 2015-2020 Year    Return 2015    25% 2016   ...
1. Consider a stock with the following return information for 2015-2020 Year    Return 2015    25% 2016    -15% 2017    3% 2018    41% 2019    -6% 2020    12% Find the following for your sample of returns: Average Return, Variance, and Standard Deviation. 2. Jamie’s portfolio consists of $15,000 in Microsoft stock and $45,000 in Coca Cola. Microsoft has an expected return of 19% annually with a standard deviation of 42%. Coca Cola has an expected return of 10% annually with a standard deviation...
The revenue and cost information for Odessa Outfitters inc. for 2015 follows: Sales Revenue       560,000 COGS...
The revenue and cost information for Odessa Outfitters inc. for 2015 follows: Sales Revenue       560,000 COGS (at standart) 342,000 DM price variance      1,000 F DM quantity variance 6,000 F DL rate varinace          4,000U DL efficiency variance 2,000 F Overhead controllable variance 3,500U Overhead volüme variance    8,000f a)What is gross profit at standard? b)What is gross profit actual? c)Write journal entries for all variance accounts assuming all units are produced and sold in the same period.
(i) In the following scenario, Between 2015 and 2016, The CPI of a small nation rose...
(i) In the following scenario, Between 2015 and 2016, The CPI of a small nation rose from 200 to 205 between these years and household incomes rose by 5% during these years. A claim is made that "Real incomes of the households remain unchanged: " DO YOU AGREE/DISAGREE WITH THE CLAIM? EXPLAIN BRIEFLY IN 2-3 LINES ONLY. (ii) : Who are the winners during high rates of inflation: Borrowers or lenders? Why? Explain in 1-2 lines only.
Following is an extract of information from the books of Express Photos: 2016 2015 Net Sales...
Following is an extract of information from the books of Express Photos: 2016 2015 Net Sales 166,500 Net Credit Sales 150,500 Inventory 13,000 15,000 Total Assets 98,000 Current Liabilites 48,000 COGS 86,000 Gross Profit 80,500 Current Assets 77,000 Net Profit 55,000 Total Liabilities 56,000 Accounts Receivable 25,000 18,000 Non leap year Calculate the following ratios: Format as noted. Current Ratio (to 1 decimal place) Answer Debt Ratio (as a percentage to 1 decimal place - no "%") Answer Days Sales...
In 2018, ABC Corp. had sales/revenue of $26,500,000, Costs of Goods Sold (COGS) of $14,500,000, Sales,...
In 2018, ABC Corp. had sales/revenue of $26,500,000, Costs of Goods Sold (COGS) of $14,500,000, Sales, General, and Administrative (SG&A) expense of $5,600,000, Depreciation expense of $1,000,000, and Interest expense of $400,000. Also assume that its average tax rate was 19%. What was ABC Corp.'s Earnings Before Interests and Taxes (or Operating Income) as of 2018?
EXCEL: In cell I4 insert formula(s) that will calculate the sum of Sales where COGS is...
EXCEL: In cell I4 insert formula(s) that will calculate the sum of Sales where COGS is greater than or equal to its average. Date Product Region SalesRep Customer Sales COGS Sum of Sales: 4/19/2020 Product3 Region3 SalesRep2 Customer16 $           14,046 $             5,337 4/19/2020 Product7 Region4 SalesRep15 Customer72 $             2,504 $             1,703 4/19/2020 Product2 Region4 SalesRep18 Customer71 $             1,505 $                 843 4/19/2020 Product6 Region4 SalesRep14 Customer88 $             4,232 $             2,793 4/19/2020 Product3 Region4 SalesRep3 Customer65 $             5,947 $             3,390 4/19/2020 Product1...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT