Given the following financial statements, historical ratios, and industry averages, calculate the UG Companys financial ratios for
Question:
aOn December 31, 2009, the firms common stock closed at $27.50.
a Based on a 365-day year and on end-of-year figures.
The term is enough to curl one's hair, conjuring up those complex problems we encountered in high school math that left many of us babbling and frustrated. But when it comes to investing, that need not be the case. In fact, there are ratios that,...
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UG Company Income Statement For the Year Ended December 31, 2012 Sales revenue Less: Cost of goods solda Gross profit Less operating expenses $10,000,000 7.500,000 S 2,500,000 300,000 650,000 50,000 200,000 Selling expense General and administrative expense Lease expense Depreciation expense Total operating expense Operating profit (EBITI) Less: Interest expense Net profits before taxes Less: Taxes (rate = 40%) Net profits after taxes Less: Preferred stock dividends Eamings available for common stockholders Eamings per share (EPS) 1.200,000 $1,300,000 200,000 $1,100,000 440,000 S 660,000 50,000 S 610.000 $3.05 Annual credit purchases of $6.2 million were made during the year UG Company Balance Sheet As of December 31, 2012 Assets Liabilities and Stockholders' Equitv Current assets Current liabilities Cash S 200,000 Accounts payable S 900,000 50,000 Notes payable 800,000 Accruals 950,000 Total current liabilities 200,000 100,000 S 1.200,000 Marketable secunties Accounts receivable Inventories Total current assets 2.000.000 Long-term debt including financial leases) $12,000,000 Stockholders equity S 3,000,000 Gross fixed assets Less: Accumulated depreci ion Net fixed assets 3.000,000 Preferred stock (25.000 shares, $2 1.000,000 S9,000,000 dividend) Common stock (200,000 shrs, $3 par 600,000 5,200,000 1000,000 S 7.800.000 Total liabilities and stockholders' equity $12.000,000 Other assets Total assets $ 1.000.000 Paid-in capital in excess ofpar $12.000.000 Retained eamings Total stockholders equity UG Company Historical and Industry Average Ratios Industry Average 2012 1.85 1.05 8.60 Industry Ratio Currentratio Quick (acid-test) ratio Inventory tumover Average collection periodt Average payment period* Fixed asset tumover Total asset tumover Debtratio Debt-to-equity ratio Times interest eamedratio Gross profit margin Operatingprofit margin Net profit margin Retum ontotal assets (ROA) Retum on common equity (ROE) Eamings per share (EPS) Price/eamings (P E) ratio Market/book (M B)ratio Actual 2010 Actual 2011 1.55 0.92 9.21 36.4 days 58.5 days 60.8 days 1.05 0.80 0.20 0.27 7.3 0.27 0.12 0.067 0.054 0.073 $2.20 10.5 1.05 1.4 1.00 9.52 45.0 days 1.08 0.74 0.20 0.25 8.2 0.30 0.12 0.067 0.049 0.066 $1.75 12 1.20 35.0 days 45.8 days 1.07 0.74 0.30 0.39 8.0 0.25 0.10 0.058 0.043 0.072 $1.50 11.2 1.10
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Complete Ratio Analysis UG Company Ratio Analysis Actual Actual Actual Industry Time Series TS Ratio 2010 2011 2012 2012 CrossSectional CS Current ratio 140 155 167 185 TS Improving CS Fair Quick rati...View the full answer
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Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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