BALANCE SHEETS: 2016 2017
Assets:
Cash 100,000 160,000
Accounts Receivable 540,000 620,000
Inventory 345,000 290,000
Fixed Assets, net 370,000 510,000
Total Assets 1,355,000 1,580,000
Liabilities and Equity:
Accounts Payable 350,000 375,000
Long-term Debt 500,000 645,000
Common Stock 50,000 55,000
Retained Earnings 455,000 505,000
Total Liabilities and Equity 1,355,000 1,580,000
INCOME STATEMENT:
Revenue 3,500,000
Cost of Goods Sold 2,275,000
General and Administrative 525,000
Depreciation Expense 110,000
Earnings Before Interest and Taxes 590,000
Interest Expense 40,000
Pretax Net Income 550,000
Income Taxes 177,000
Net Income 353,000
1. Assuming that all of Plyler’s sales were on credit, what was the company’s Days Sales Outstanding in 2017? (For balance sheet accounts, use the average of the beginning and end-of-year balances).
2. Starting with Net Income, show the calculation of Cash Flow from Operations for Plyler for 2017?
3. What was Plyler’s Equity Multiplier for 2017?
4. What was Plyler’s Return on Equity in 2017 (For balance sheet accounts, use the average of the beginning and end-of-year balances)?
5. If Plyler had 100,000 common shares outstanding during 2017 and its stock is currently worth $44.52 per share, what is the firm’s Price : Earnings (PE) ratio?
6. If Plyler projects 2018 sales to increase by 15% over 2017, its after-tax profit margin to remain the same, and anticipates a 30% dividend payout ratio, what are its projected retained earnings by the end of 2018?
7. Assuming that Plyler’s net working capital varies directly with sales, based on a 15% sales increase in 2018, what is the projected (or pro forma) accounts receivable balance at the end of 2018?
8. If Plyler projects that by the end of 2017, it was operating at 70% of capacity, what is its full level capacity of sales?
9. Stop and Shop Supermarkets has a 4.5% profit margin and a 15% dividend payout ratio. The total asset turnover is 1.4 and its debt-equity ratio is 0.5. What is its sustainable rate of growth?
10. Merrick Town Bagel has a 9% percent return on assets and a 80% percent retention ratio. What is its internal growth rate?