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Balance Sheet and Income Statement Analysis

The balance sheet and income statement shown below are for Kryloc Inc. You will find that the firm has no amortization charges. It also does not lease any assets and none of its debt must be retired during the next 5 years. 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 bef 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

Assignment Questions

i. What is the firm's current ratio?
ii. What is the firm's quick ratio?
iii. What is the firm's "days sales outstanding" (DSO)? Assume a 365-day year for this calculation.
iv. What is the firm's total assets turnover?
v. What is the firm's inventory turnover ratio?
vi. What is the firm's TIE?
vii. What is the firm's debt/assets ratio?
viii. What is the firm's ROA?
ix. What is the firm's ROE?
x. What is the firm's dividends per share?
xi. What is the firm's EPS?
xii. What is the firm's P/E ratio?
xiii. What is the firm's book value per share?

Solution Preview

Please refer to the attachment.

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The balance sheet and income statement shown below are for Kryloc Inc. You will find that the firm has no amortization charges. It also does not lease any assets and none of its debt must be retired during the next 5 years. 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 ...

Solution Summary

The balance sheet and income statement analysis are examined. Notes with payable roll over are determined.

$2.19