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WIPER, INC. Condensed Balance Sheets December 31, 2017, 2016, 2015 (in millions) 2017 2016 2015 Current...

WIPER, INC.
Condensed Balance Sheets
December 31, 2017, 2016, 2015
(in millions)
2017 2016 2015
Current assets $ 683 $ 915 $ 763
Other assets 2,416 1,923 1,722
Total assets $ 3,099 $ 2,838 $ 2,485
Current liabilities $ 576 $ 806 $ 713
Long-term liabilities 1,513 1,003 851
Stockholders’ equity 1,010 1,029 921
Total liabilities and stockholders' equity $ 3,099 $ 2,838 $ 2,485
WIPER, INC
Selected Income Statement and Other Data
For the year Ended December 31, 2017 and 2016
(in millions)
2017 2016
Income statement data:
Sales $ 3,053 $ 2,916
Operating income 299 313
Interest expense 87 68
Net income 200 195
Other data:
Average number of common shares outstanding 41.6 47.0
Total dividends paid $ 53.0 $ 52.6

Required:

a. Calculate return on investment, based on net income and average total assets, for 2017 and 2016. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

b. Calculate return on equity for 2017 and 2016. (Round your answers to 1 decimal place.)

c. Calculate working capital and the current ratio for each of the past three years. (Enter your answers in millions (i.e., 5,000,000 should be entered as 5). Round "Current ratio" to 1 decimal place.)

d. Calculate earnings per share for 2017 and 2016. (Round your answers to 2 decimal places.)

e. If Wiper's stock had a price/earnings ratio of 13 at the end of 2017, what was the market price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

f. Calculate the cash dividend per share for 2017 and the dividend yield based on the market price calculated in part e. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

g. Calculate the dividend payout ratio for 2017. (Do not round intermediate calculations.)

h. Assume that accounts receivable at December 31, 2017, totaled $312 million. Calculate the number of days' sales in receivables at that date. (Use 365 days a year. Do not round intermediate calculations.)

i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2017 and 2016. (Round "Debt ratio" to 1 decimal place and "Debt/equity ratio" to the nearest whole percent.)

j. Calculate the times interest earned ratio for 2017 and 2016. (Round your answers to 1 decimal place.)

Solutions

Expert Solution

2017 2016 2015
ans a
Return on Investment
Net Income/Avg total assets 6.7 7.3
200/((3099+2838)/2)*100 195/((2485+2838)/2)*100
ans b
Return on equity
Net Income/Avg stockholder equity 19.6 20.0
200/((1010+1029)/2)*100 195/((1029+921)/2)*100
ans c
Working capital 107 109 50
CA-CL 683-576 915-806 763-713
Current Rtaio
CA/CL 1.2 1.1 1.1
683/576 915/806 763/713
ans d
EPS 4.81 4.15
Net Income/Avg common stock 200/41.6 195/47
ans e
PE=MPS/EPS 62.53
13*4.81
ans f
Cash dividend per share 1.27
53/41.6
Dividend yield ratio 0.02
DPS/MPS 1.27/62.53
ans g
Dividend payout ratio 0.265
Div/Net Income 53/200
ans h accounts receivable turnover 9.78525641
Sales/Avg accounts rec 3053/312
average collection period 37.30101539
365/sales*Avg accounts receivable 365/3053*312
ans i
Debt ratio 0.7 0.6
Total debts/Total assets (576+1513)/3099 (806+1003)/2838
Debt to equity ratio 2.1 1.8
(576+1513)/1010 (806+1003)/1029
ans j
Times interest earned ratio 3.4 4.6
299/87 313/68

ekkarill92 answered 2 years ago
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