Last year, Stevens Inc. had sales of $400,000 with a cost of goods sold of $112,000....
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Last year, Stevens Inc. had sales of $400,000 with a cost of goods sold of $112,000. The firm's operating expenses were $130,000, and its increase in retained earnings was $58,000. There are currently 22,000 common stock shares outstanding and the firm pays a $1.60 dividend per share. Assuming the firm's earnings are taxed at 21 percent, construct the firm's income statement. b. Compute the firm's operating profit margin. 4. What was the times interest earned? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest 5 appearance of the data in your formulas, usually the Given Data section. 6 DATA 7 Sales Cost of goods sold 9 Operating expenses 10 Increase in retained earnings II Common stock outstanding 12 Dividend per share 13 Tax rate 14 15 SOLUTION Assuming the firm's earnings are taxed at 21 percent, construct the firm's income 16 statement. 17 18 Income Statement: 19 Net sales 20 Cost of goods sold 21 Gross profit 22 Operating expenses 23 Operating income 24 Interest expense 25 Income before taxes 26 Tax 27 Net income 28 29 b. Compute the firm's operating profit margin. 30 $400,000 112,000 130,000 58,000 31 Operating profit margin 32 33 e. What was the times interest earned? 34 35 Times interest earned 36 22,000 shares $1.60 21% $400,000 112,000 $288,000 130,000 $158.000 Last year, Stevens Inc. had sales of $400,000 with a cost of goods sold of $112,000. The firm's operating expenses were $130,000, and its increase in retained earnings was $58,000. There are currently 22,000 common stock shares outstanding and the firm pays a $1.60 dividend per share. Assuming the firm's earnings are taxed at 21 percent, construct the firm's income statement. b. Compute the firm's operating profit margin. 4. What was the times interest earned? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest 5 appearance of the data in your formulas, usually the Given Data section. 6 DATA 7 Sales Cost of goods sold 9 Operating expenses 10 Increase in retained earnings II Common stock outstanding 12 Dividend per share 13 Tax rate 14 15 SOLUTION Assuming the firm's earnings are taxed at 21 percent, construct the firm's income 16 statement. 17 18 Income Statement: 19 Net sales 20 Cost of goods sold 21 Gross profit 22 Operating expenses 23 Operating income 24 Interest expense 25 Income before taxes 26 Tax 27 Net income 28 29 b. Compute the firm's operating profit margin. 30 $400,000 112,000 130,000 58,000 31 Operating profit margin 32 33 e. What was the times interest earned? 34 35 Times interest earned 36 22,000 shares $1.60 21% $400,000 112,000 $288,000 130,000 $158.000
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Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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