The balance sheet and income statement shown below are for Pettijohn 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 2010
Cash and securities $1,554.0
Accounts receivable 9,660.0
Inventories 13,440.0
Total current assets $24,654.0
Net plant and equipment 17,346.0
Total assets $42,000.0
Liabilities and Equity
Accounts payable $7,980.0
Notes payable 5,880.0
Accruals 4,620.0
Total current liabilities $18,480.0
Long-term bonds 10,920.0
Total debt $29,400.0
Common stock 3,360.0
Retained earnings 9,240.0
Total common equity $12,600.0
Total liabilities and equity $42,000.0
Income Statement (Millions of $) 2010
$58,800.0
Net sales
0
Operating costs except depr’n $54,978.0
Depreciation $1,029.0
Earnings bef int and taxes (EBIT) $2,793.0
Less interest 1,050.0
Earnings before taxes (EBT) $1,743.0
Taxes $610.1
Net income $1,133.0
Other data:
Shares outstanding (millions) 175.00
Common dividends $509.83
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $77.69

(3.2) Calculating ratios given financial stmts CK Answer: d MEDIUM

i. What is the firm's current ratio?

a. 0.97
b. 1.08
c. 1.20
d. 1.33
e. 1.47

(3.2) Calculating ratios given financial stmts CK Answer: b MEDIUM

ii. What is the firm's quick ratio?

a. 0.49
 b. 0.61
c. 0.73
d. 0.87
e. 1.05

(3.3) Calculating ratios given financial stmts CK Answer: e MEDIUM

iii What is the firm's days sales outstanding? Assume a 360-day year for
. this calculation.

a. 48.17
b. 50.71
c. 53.38
d. 56.19
e. 59.14

(3.3) Calculating ratios given financial stmts CK Answer: c MEDIUM

iv. What is the firm's total assets turnover?

a. 0.90
b. 1.12
c. 1.40
d. 1.68
e. 2.02

(3.3) Calculating ratios given financial stmts Answer: a MEDIUM

CK
v. What is the firm's inventory turnover ratio?

a. 4.38
b. 4.59
c. 4.82
d. 5.06
e. 5.32

(3.4) Calculating ratios given financial stmts Answer: d MEDIUM

CK
vi. What is the firm's TIE?

a. 1.94
b. 2.15
c. 2.39
d. 2.66
e. 2.93

(3.4) Calculating ratios given financial stmts Answer: c MEDIUM

CK
vii. What is the firm's EBITDA coverage?

a. 3.29
b. 3.46
 c. 3.64
d. 3.82
e. 4.01

(3.4) Calculating ratios given financial stmts Answer: e MEDIUM

CK
viii What is the firm's debt ratio?
.

a. 45.93%
b. 51.03%
c. 56.70%
d. 63.00%
e. 70.00%

(3.5) Calculating ratios given financial stmts Answer: a MEDIUM

CK
ix. What is the firm's ROA?

a. 2.70%
b. 2.97%
c. 3.26%
d. 3.59%
e. 3.95%

(3.5) Calculating ratios given financial stmts Answer: b MEDIUM

CK
x. What is the firm's ROE?

a. 8.54%
b. 8.99%
c. 9.44%
d. 9.91%
e. 10.41%

(3.5) Calculating ratios given financial stmts Answer: c MEDIUM

CK
xi. What is the firm's BEP?

a. 6.00%
b. 6.32%
c. 6.65%
d. 6.98%
e. 7.33%

(3.5) Calculating ratios given financial stmts Answer: d MEDIUM

CK
xii. What is the firm's profit margin?

a. 1.40%
 b. 1.56%
c. 1.73%
d. 1.93%
e. 2.12%

(3.5) Calculating ratios given financial stmts Answer: b MEDIUM

CK
xiii What is the firm's dividends per share?
.

a. $2.62
b. $2.91
c. $3.20
d. $3.53
e. $3.88

(3.5) Calculating ratios given financial stmts Answer: e MEDIUM

CK
xiv. What is the firm's cash flow per share?

a. $10.06
b. $10.59
c. $11.15
d. $11.74
e. $12.35

(3.6) Calculating ratios given financial stmts Answer: c MEDIUM

CK
xv. What is the firm's EPS?

a. $5.84
b. $6.15
c. $6.47
d. $6.80
e. $7.14

(3.6) Calculating ratios given financial stmts Answer: a MEDIUM

CK
xvi. What is the firm's P/E ratio?

a. 12.0
b. 12.6
c. 13.2
d. 13.9
e. 14.6

(3.6) Calculating ratios given financial stmts Answer: d MEDIUM

CK
xvii. What is the firm's book value per share?
 a. $61.73
b. $64.98
c. $68.40
d. $72.00
e. $75.60

(3.6) Calculating ratios given financial stmts Answer: e MEDIUM

CK
xviii What is the firm's market-to-book ratio?
.

a. 0.56
b. 0.66
c. 0.78
d. 0.92
e. 1.08

(3.8) Calculating ratios given financial stmts Answer: a MEDIUM

CK
xix. What is the firm's equity multiplier?

a. 3.33
b. 3.50
c. 3.68
d. 3.86
e. 4.05

i. (3.2) Calculating ratios given financial stmts C K Answer: d MEDIUM

Current ratio = Current assets/Current liabilities = 1.33

ii. (3.2) Calculating ratios given financial stmts C K Answer: b MEDIUM

Quick ratio = (CA – Inventory)/CL = 0.61

iii. (3.3) Calculating ratios given financial stmts C K Answer: e MEDIUM

DSO = Accounts receivable/(Sales/360) = 59.14

iv. (3.3) Calculating ratios given financial stmts C K Answer: c MEDIUM

Total assets turnover ratio = Sales/Total assets = 1.40

v. (3.3) Calculating ratios given financial stmts C K Answer: a MEDIUM

Inventory turnover ratio = Sales/Inventory = 4.38

vi. (3.4) Calculating ratios given financial stmts C K Answer: d MEDIUM

TIE = EBIT/Interest charges = 2.66

vii. (3.4) Calculating ratios given financial stmts C K Answer: c MEDIUM

 EBITDA covg =(EBITDA + lease)/(Int + principal + lease) = 3.64

viii. (3.4) Calculating ratios given financial stmts C K Answer: e MEDIUM

Debt ratio = Total debt/Total assets = 70.0%

ix. (3.5) Calculating ratios given financial stmts C K Answer: a MEDIUM

ROA = Net income/Total assets = 2.70%

x. (3.5) Calculating ratios given financial stmts C K Answer: b MEDIUM

ROE = Net income/Common equity = 8.99%

xi. (3.5) Calculating ratios given financial stmts C K Answer: c MEDIUM

BEP = EBIT/Total assets = 6.65%

xii. (3.5) Calculating ratios given financial stmts C K Answer: d MEDIUM

Profit margin = Net income/Sales = 1.93%

xiii. (3.5) Calculating ratios given financial stmts C K Answer: b MEDIUM

DPS = Common dividends paid/Shares outstanding = $2.91

xiv. (3.5) Calculating ratios given financial stmts C K Answer: e MEDIUM

CFPS = (Net income + Depreciation)/Shares outstanding = $12.35

xv. (3.6) Calculating ratios given financial stmts C K Answer: c MEDIUM

EPS = Net income/common shares outstanding = $6.47

xvi. (3.6) Calculating ratios given financial stmts C K Answer: a MEDIUM

P/E ratio = Price per share/Earnings per share = 12.0

xvii. (3.6) Calculating ratios given financial stmts C K Answer: d MEDIUM

BVPS = Common equity/Shares outstanding = $72.00

xviii. (3.6) Calculating ratios given financial stmts C K Answer

Market/book ratio (M/B) = Price per share/BVPS = 1.08

xix. (3.8) Calculating ratios given financial stmts C K Answer: a MEDIUM

Equity multiplier = Total assets/Common equity = 3.33