Income statement for the year ending 12/31/2021 Sales/revenues 1,750 Variable cost a.k.a. cost of goods sold (COGS)
Question:
Income statement for the year ending 12/31/2021
Sales/revenues | 1,750 |
Variable cost a.k.a. cost of goods sold (COGS) | (700) |
Fixed cost a.k.a. selling general and administrative (SG&A) | (400) |
Depreciation | (100) |
EBIT | 550 |
Interest expense | (100) |
EBT | 450 |
Taxes (40%) | (180) |
Net Income | 270 |
The NI belongs to the stockholders, assume that half is paid out in dividends and the rest is added to retained earnings.
- Dividends 135 (50% of net income in this case)
- Additions to retained earnings 135 (net income minus dividends)
Balance sheet on 12/31/2021:
Cash | 100 | A/P | 200 |
A/R | 150 | Accruals | 125 |
Inventory | 250 | Notes payable | 100 |
Fixed assets | 1,500 | Long term debt | 725 |
Common stock | 50 | ||
Retained earning | 800 | ||
Total assets | 2,000 | Total claims | 2,000 |
Calculate the price to earnings ratio(P/E ratio) and ROE
Statistics The Exploration & Analysis of Data
ISBN: 978-1133164135
7th edition
Authors: Roxy Peck, Jay L. Devore