Question: See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydeco's ROE each year from 2015 to 2019. b.
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydeco's ROE each year from 2015 to 2019. b. Compute Mydeco's ROA each year
from 2015 to 2019. c. Which return is more volatile? Why?
a. Compute Mydeco's PE ratio each year from 2015 to 2019.
Calculate the ROE for
20152019
below:(Round dollar amounts to one decimal place and ROE to two decimal places.)
| Year |
| 2015 | |
| Net Income | $ |
| |
| Stockholders' Equity | $ |
| |
| ROE |
|
| % |
| 20152019 Financial Statement Data and Stock Price Data for Mydeco Corp. | |||||
| (All data as of fiscal year end; in $ millions) | |||||
| Income Statement | 2015 | 2016 | 2017 | 2018 | 2019 |
| Revenue | 398.8 | 364.9 | 429.3 | 508.4 | 604.1 |
| Cost of Goods Sold | (184.0) | (172.6) | (209.9) | (249.1) | (291.7) |
| Gross Profit | 214.8 | 192.3 | 219.4 | 259.3 | 312.4 |
| Sales and Marketing | (68.0) | (68.0) | (84.1) | (103.6) | (121.8) |
| Administration | (60.7) | (60.6) | (58.0) | (65.6) | (77.8) |
| Depreciation & Amortization | (25.9) | (26.4) | (36.3) | (38.5) | (39.0) |
| EBIT | 60.2 | 37.3 | 41.0 | 51.6 | 73.8 |
| Interest Income (Expense) | (33.3) | (33.3) | (31.6) | (36.1) | (37.9) |
| Pretax Income | 26.9 | 4.0 | 9.4 | 15.5 | 35.9 |
| Income Tax | (9.4) | (1.4) | (3.3) | (5.4) | (12.6) |
| Net Income | 17.5 | 2.6 | 6.1 | 10.1 | 23.3 |
| Shares Outstanding (millions) | 56.2 | 56.2 | 56.2 | 56.2 | 56.2 |
| Earnings per Share | $0.31 | $0.05 | $0.11 | $0.18 | $0.41 |
| Balance Sheet | 2015 | 2016 | 2017 | 2018 | 2019 |
| Assets | |||||
| Cash | 49.8 | 67.7 | 84.5 | 76.1 | 85.5 |
| Accounts Receivable | 88.7 | 70.5 | 70.2 | 76.1 | 86.2 |
| Inventory | 35.5 | 30.4 | 29.1 | 33.5 | 34.7 |
| Total Current Assets | 174.0 | 168.6 | 183.8 | 185.7 | 206.4 |
| Net Property, Plant & Equipment | 246.3 | 240.9 | 304.7 | 348.8 | 349.2 |
| Goodwill & Intangibles | 358.3 | 358.3 | 358.3 | 358.3 | 358.3 |
| Total Assets | 778.6 | 767.8 | 846.8 | 892.8 | 913.9 |
| Liabilities & Stockholders' Equity | |||||
| Accounts Payable | 19.6 | 17.6 | 22.2 | 26.4 | 30.5 |
| Accrued Compensation | 7.5 | 6.5 | 7.7 | 8.5 | 8.8 |
| Total Current Liabilities | 27.1 | 24.1 | 29.9 | 34.9 | 39.3 |
| Long-Term Debt | 498.4 | 498.4 | 574.8 | 601.6 | 601.6 |
| Total Liabilities | 525.5 | 522.5 | 604.7 | 636.5 | 640.9 |
| Stockholders' Equity | 253.1 | 245.3 | 242.1 | 256.3 | 273.0 |
| Total Liabilities & Stockholders' Equity | 778.6 | 767.8 | 846.8 | 892.8 | 913.9 |
| Statement of Cash Flows | 2015 | 2016 | 2017 | 2018 | 2019 |
| Net Income | 17.5 | 2.6 | 6.1 | 10.1 | 23.3 |
| Depreciation & Amortization | 25.9 | 26.4 | 36.3 | 38.5 | 39.0 |
| Change in Accounts Receivable | 3.9 | 18.2 | 0.3 | (5.9) | (10.1) |
| Change in Inventory | (3.7) | 5.1 | 1.3 | (4.4) | (1.2) |
| Change in Pay. & Accrued Comp. | 1.9 | (3.0) | 5.8 | 5.0 | 4.4 |
| Cash from Operations | 45.5 | 49.3 | 49.8 | 43.3 | 55.4 |
| Capital Expenditures | (24.7) | (26.8) | (104.8) | (73.9) | (40.0) |
| Cash from Investing Activ. | (24.7) | (26.8) | (104.8) | (73.9) | (40.0) |
| Dividends Paid | (4.6) | (4.6) | (4.6) | (4.6) | (6.0) |
| Sale (or Purchase) of Stock | - | - | - | - | - |
| Debt Issuance (Pay Down) | - | - | 76.4 | 26.8 | - |
| Cash from Financing Activ. | (4.6) | (4.6) | 71.8 | 22.2 | (6.0) |
| Change in Cash | 16.2 | 17.9 | 16.8 | (8.4) | 9.4 |
| Mydeco Stock Price | $8.15 | $4.02 | $5.98 | $7.98 | $12.65 |
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