Question: The balance sheet and income statement shown below are for Berk Inc. Note that the firm has no amortization charges, it does not lease any

 The balance sheet and income statement shown below are for Berk
Inc. Note that the firm has no amortization charges, it does not
lease any assets, none of its debt must be retired during the
next 5 years, and the notes payable will be rolled over Balance
Sheet (Millions of $) Assets 2019 Cash and securities $4,200 Accounts receivable
17,500 Inventories 20,300 Total current assets $42,000 Net plant and equipment $28,000
Total assets $70,000 Liabilities and Equity Accounts payable $22,509 Accruals 14,391 Notes

The balance sheet and income statement shown below are for Berk Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over Balance Sheet (Millions of $) Assets 2019 Cash and securities $4,200 Accounts receivable 17,500 Inventories 20,300 Total current assets $42,000 Net plant and equipment $28,000 Total assets $70,000 Liabilities and Equity Accounts payable $22,509 Accruals 14,391 Notes payable 6,000 6,000 Notes payable $42,900 Total current liabilities $11,000 Long-term bonds Total liabilities $53,900 Common stock $3,542 Retained earnings 12,558 Total common equity $16,100 Total liabilities and equity $70,000 Income Statement (Millions of S) 2019 Net sales $105,000 Operating costs except depreciation 97,650 Depreciation 2,100 Earnings before interest and taxes (EBIT) $5,250 Earnings before interest and taxes (EBIT) $5,250 Less interest 1,020 Earnings before taxes (EBT) $4,230 Taxes 1,058 Net income $2,538 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $888.30 Int rate on notes payable & L-T bonds 6% Federal plus state income tax rate 40% Year-end stock price $60.91 What is the firm's ROE? Do not round your intermediate calculations. 14.35% 15.76% O 16.55% O 16.24% O 16.39% What is the firm's ROA? Do not round your intermediate calculations. O 3.63% O 3.08% O 2.83% 4.17% 2.90% What is the firm's days sales outstanding? Assume a 365-day year for this calculation. Do not round your intermediate calculations. O 56.58 O 74.83 O 68.13 O 69.96 60.83 What is the firm's P/E ratio? Do not round your intermediate calculations. 12.0 O 12.6 13.2 O 13.9 0 14.6

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!