Honda Motor Company is a Japanese company with sales equivalent to more than $100 billion.
The company’s income statement and balance sheet for the year ended March 31, 2011, are shown in Exhibit 17-10 and 17-11. Monetary amounts are in Japanese yen (¥).

1. Prepare a common-size income statement, that is, one showing component percentages.
2. Compute the following ratios:
a. Current ratio
b. Total debt to equity
c. Gross profit rate
d. Return on stockholders’ equity (March 31, 2010 stockholders’ equity was ¥4,456 billion)
e. P/E ratio (the market price on March 31, 2011, was approximately ¥2,207 per share)
f. Dividend-payout ratio
3. What additional information would help you interpret the percentages and ratios youcalculated?

  • CreatedNovember 19, 2014
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