Question

Listed are the 2015 financial statements for Garners’ Platoon Mental Health Care, Inc. Spread the balance sheet and income statement. Calculate the financial ratios for the firm, including the internal and sustainable growth rates. Using the DuPont system of analysis and the industry ratios reported as follows, evaluate the performance of the firm.
Garners’ Platoon Mental Health Care, Inc.
Balance Sheet as of December 31, 2015
(in millions of dollars)


Garners’ Platoon Mental Health Care, Inc.
Income Statement for Year Ending December 31, 2015
(in millions of dollars)

Net sales (all credit) .................... $4,980
Less: Cost of goods sold .................. 2,246
Gross profits ....................... $2,734
Less: Other operating expenses ................ 125
Earnings before interest, taxes, depreciation, and amortization (EBITDA) $2,609
Less: Depreciation ..................... 200

Earnings before interest and taxes (EBIT) ........... $2,409
Less: Interest ....................... 315
Earnings before taxes (EBT) ................ $2,094
Less: Taxes ....................... 767
Net income ....................... $1,327
Less: Preferred stock dividends ............... $ 60
Net income available to common stockholders ......... $1,267
Less: Common stock dividends ............... 395
Addition to retained earnings ................ $ 872
Per (common) share data:
Earnings per share (EPS) ................ $ 6.335
Dividends per share (DPS) ............... $ 1.975
Book value per share (BVPS) ............... $19.745
Market value (price) per share (MVPS) .......... $26.850

Garners’ Platoon Mental Health Care, Inc.
Industry
Current ratio ..................... 2.00 times
Quick ratio .................... 1.20 times
Cash ratio ...................... 0.25 times
Inventory turnover ................. 2.50 times
Days’ sales in inventory...............146.00 days
Average collection period .............. 91.00 days
Average payment period ................ 100.00 days
Fixed asset turnover ................. 1.25 times
Sales to working capital ............... 4.00 times
Total asset turnover ................ 0.50 times
Capital intensity .................. 2.00 times
Debt ratio .................... 50.00%
Debt-to-equity .................. 1.00 times
Equity multiplier ................. 2.00 times
Times interest earned ............... 7.25 times
Cash coverage .................... 8.00 times
Profit margin .................. 18.75%
Gross profit margin ................. 49.16%
Operating profit margin .............. 42.02%
Basic earnings power ................ 19.90%
ROA ...................... 9.38%
ROE....................... 18.75%
Dividend payout .................. 35.00%
Market-to-book ratio ............... 1.30 times
PE ratio .................... 4.10times


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  • CreatedSeptember 23, 2014
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