Question: The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any
The balance sheet and income statement shown below are for Koski 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 4 years, and the notes payable will be rolled over.
Balance Sheet (Millions of $)
Assets 2010
Cash and securities $ 2,500
Accounts receivable 11,500
Inventories 16,000
Total current assets $30,000
Net plant and equipment $20,000
Total assets $50,000
Liabilities and Equity
Accounts payable $ 9,500
Notes payable 7,000
Accruals 5,500
Total current liabilities $22,000
Long-term bonds $15,000
Total debt $37,000
Common stock $ 2,000
Retained earnings 11,000
Total common equity $13,000
Total liabilities and equity $50,000
Income Statement (Millions of $) 2010
Net sales $87,500
Operating costs except depreciation 81,813
Depreciation 1,531
Earnings before interest and taxes (EBIT) $ 4,156
Less interest 1,375
Earnings before taxes (EBT) $ 2,781
Taxes 973 Net income $ 1,808
Other data:
Shares outstanding (millions) 500.00
Common dividends $632.73
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $43.39
1. What is the firm's P/E ratio?
2. What is the firm's quick ratio?
3. What is the firm's total assets turnover?
4. What is the firm's debt/assets ratio?
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