The comparative financial statements of Blige Inc. are as follows. The market pr
ID: 2521598 • Letter: T
Question
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $57 on December 31, 2016.
Required:
Determine the following measures for 2016, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings, January 1 $1,944,750 $1,648,550 Add net income for year 432,000 337,700 Total $2,376,750 $1,986,250 Deduct dividends On preferred stock $7,000 $7,000 On common stock 34,500 34,500 Total $41,500 $41,500 Retained earnings, December 31 $2,335,250 $1,944,750Explanation / Answer
Tell me in case of any doubt.
1. Working capital Current assets - current liabililites = 2688758-814775 $ 1,873,983.00 2. Current ratio Current assets/ current liabililites = 2688758/814775 3.3 3. Quick ratio (cash+Temporary investments+A/R)/Current liabilities = (643710+974260+540200)/814775 2.6 4. Accounts receivable turnover Sales/((opening A/R+closing A/R)/2) = 2852430/((540200+511000)/2) 5.4 5. Number of days' sales in receivables 365/Accounts receivable turnover = 365/5.40 days 67.59 6. Inventory turnover COGS/((opening Inventory+closing inventory)/2) = 1131500/((408800+321200)/2) 3.1 7. Number of days' sales in inventory 365/Inventory turnover = 365/3.1 days 117.74 8. Ratio of fixed assets to long-term liabilities Fixed assets/long-term liabilities = 3510000/2700000 1.3 9. Ratio of liabilities to stockholders' equity Total liabilities/stockholders' equity = 35147753195250 1.1 10. Number of times interest charges are earned EBIT/Interest = 706900/216000 3.3 11. Number of times preferred dividends are earned Net Income/Preffered dividend =432000/7000 61.7 12. Ratio of sales to assets Sales/Total Asserts = 2852430/6710025 0.4 13. Rate earned on total assets Net Income/average total assets =432000/((6710025+5071793)/2) % 7.3% 14. Rate earned on stockholders' equity Net Income/Average total stockholder's equity =432000/((3195250+2804750)/2) % 14.4% 15. Rate earned on common stockholders' equity Net Income/Average total common stockholder's equity =432000/((46000+2335250+460000+1944750)/2) % 16.6% 16. Earnings per share on common stock Net Income/Number of equity shares = 432000/(460000/10) $ 9.39 17. Price-earnings ratio Current market price per share / EPS = 57/9.39 6.1 18. Dividends per share of common stock Dividend per share/Number of equity shares = 34500/(460000/10) $ 0.75 19. Dividend yield Current market price per share / Dividend per share = 57/0.75 % 1.3%