Question
In: Finance
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 and depreciation expense of $19,000. At the end of the year, Smashville stock sold for $42 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.)
Solutions
Expert Solution
| Cash | 21000 | Current liabilities | 12000 |
| Operating assets | 64000 | Long term debt | 32000 |
| Fixed assets | 125000 | Other liabilities | 5000 |
| Investments | 36000 | ||
|
Other assets |
40000 |
Stockholders' equity [ 286000 - 12000 - 32000 - 5000 ] |
237000 |
| Total assets | 286000 | Total liabilities and equity | 286000 |
| Book value per share = Stockholders' equity / shares outstanding = 237000 / 17000 | 13.94 |
| Price book ratio = Share price / Book value per share = 42 / 13.94 | 3.01 |
| Earnings = ( Net sales - Cost of goods sold - Operating expense - Interest expense + Investment income ) * ( 1 - Tax% ) | |
| Earnings = ( 387000 - 184000 - 88000 - 7400 + 1600 ) * ( 1 - 30% ) | 76440 |
| Earnings per share = Earnings / Shares outstanding = 76440 / 17000 | 4.50 |
| Price-earnings ratio = Share price / Earnings per share = 42 / 4.50 | 9.33 |
| Cash flow per share = ( Earnings + Depreciation expense ) / Shares outstanding = ( 76440 + 19000 ) / 17000 | 5.61 |
| Price-cash flow ratio = Share price / Cash flow per share = 42 / 5.61 | 7.49 |
jeff jeffy answered 1 year agoRelated Solutions
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: $ 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: $ 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: $ 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: $224,000 Investment income:...
You are given the following information for Smashville, Inc.
Cost of goods sold:
$224,000
Investment income:
$2,400
Net sales:
$389,000
Operating expense:
$90,000
Interest expense:
$7,400
Dividends:
$15,000
Tax rate:
21
%
Current liabilities:
$24,000
Cash:
$21,000
Long-term debt:
$24,000
Other assets:
$40,000
Fixed assets:
$136,000
Other liabilities:
$5,000
Investments:
$44,000
Operating assets:
$37,000
During the year, Smashville, Inc., had 24,000 shares of stock
outstanding and depreciation expense of $15,000. Calculate the book
value per share, earnings per share, and...
You are given the following information for Smashville, Inc. Cost of goods sold: $175,000 Investment income:...
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: 21 % 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 depreciation expense of
$15,000. Calculate the book value per share, earnings per share,
and...
You are given the following information for Smashville, Inc. Cost of goods sold: $175,000 Investment income:...
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:
21
%
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 depreciation expense of $15,000. Calculate the book
value per share, earnings per share, and...
You are given the following information for Smashville, Inc. Cost of goods sold $ 179,000 Current...
You are given the following information for Smashville, Inc.
Cost of goods sold
$
179,000
Current Liabilities
$ 18,000
Investment income
$
1,500
Cash
$ 21,000
Net sales
$
364,000
Long-term debt
$ 45,000
Operating expense
$
78,000
other assets
$ 39,000
Interest expense
$
7,400
fixed assets
$ 160,000
Dividends
$
12,000
other liabilities
$ 4,000
Tax rate
35%
investments
$ 35,000
operating assets
$ 64,000
During the year, Smashville, Inc., had 17,000 shares of stock
outstanding and depreciation...
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