Gallinas Industries Balance Sheet December 31 Assets Liabilities and Stockholders' Equity Cash $40,000 Accounts payable $100,000 Marketable
Question:
Gallinas Industries Balance Sheet December 31
Assets | Liabilities and Stockholders' Equity | |||
Cash | $40,000 | Accounts payable | $100,000 | |
Marketable securities | 60,000 | Notes payable | 30,000 | |
Accounts receivable | 120,000 | Accrued wages | 30,000 | |
Inventories | 160,000 | Total current liabilities | $160,000 | |
Total current assets | $380,000 | Long-term debt | $180,000 | |
Land and buildings (net) | $150,000 | Preferred stock | $80,000 | |
Machinery and equipment | 250,000 | Common stock (10,000 shares) | 260,000 | |
Total fixed assets (net) | $400,000 | Retained earnings | 100,000 | |
Total assets | $780,000 | Total liabilities and stockholders' equity | $780,000 |
Additional information with respect to the firm isavailable:
1. Preferred stock can be liquidated at book value.
2. Accounts receivable and inventories can be liquidated at 90% of book value.
3. The firm has10,000 shares of common stock outstanding.
4. All interest and dividends are currently paid up.
5. Land and buildings can be liquidated at 130%
of book value.6. Machinery and equipment can be liquidated at 70% of book value.
7. Cash and marketable securities can be liquidated at book value.
Given this information, answer the following:
a. What is Gallinas Industries' book value per share?
b. What is its liquidation value per share?
c. Compare, contrast, and discuss the values found in parts a and b.
d. Gallinas Industries' book value per share is $nothing.
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter