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FIN Problem - Pettijohn Inc.

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Question;The balance sheet and income statement shown below are for Pettijohn Inc. Calculate the liquidity, asset management, debt management, profitability, and market value ratios for Pettijohn. Based on these financial ratios, what are some of the firm?s financial strengths and weaknesses? Construct the firm?s DuPont Equation and discuss what factors are driving (or impeding) profitability.Balance Sheet (Millions of $) Assets 2012Cash and securities $ 1,554.0Accounts receivable 9,660.0Inventories 13,440.0Total current assets $24,654.0Net plant and equipment 17,346.0Total assets $42,000.0Liabilities and Equity Accounts payable $ 7,980.0Notes payable 5,880.0Accruals 4,620.0Total current liabilities $18,480.0Long-term bonds 10,920.0Total debt $29,400.0Common stock 3,360.0Retained earnings 9,240.0Total common equity $12,600.0Total liabilities and equity $42,000.0Income Statement (Millions of $) 2012Net sales $58,800.0Operating costs except depr'n $54,978.0Depreciation $ 1,029.0Earnings bef int and taxes (EBIT) $ 2,793.0Less interest 1,050.0Earnings before taxes (EBT) $ 1,743.0Taxes $ 610.1Net income $ 1,133.0Other data: Shares outstanding (millions) 175.00Common dividends $ 509.83Int rate on notes payable & L-T bonds 6.25%Federal plus state income tax rate 35%Year-end stock price $77.69

 

Paper#49344 | Written in 18-Jul-2015

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