1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
bixtya [17]
3 years ago
15

Windswept, Inc. 2011 Income Statement ($ in milions)

Business
1 answer:
Degger [83]3 years ago
5 0

Answer:

<h2>Windswept, Inc.</h2>

2011:

1. Equity multiplier = Total Assets / Stockholders' Equity

= $6,040/$3,710 = 1.628

2. Retention Ratio = Retained Earnings for the current period / Net Income = ($710 - $530)/$481 = 0.374 or 37%

3. ROA (Return on Assets): ROA = Net Income / Total Assets

= $481 /$6,040 = 0.0796 or 7.96%

4. ROE (Return on Equity) = Net Income / Average Equity

= $481 / $3,720 = 0.1293 or 12.9%

Average Equity = ($3,730 + 3,710) / 2 = $3,720

5. Internal Growth Rate = Retained Earnings / Total Assets

= $710 / $6,040 = 0.1175 or 11.75%

6. Sustainable Growth Rate = Earnings Retention Rate x Return on Equity

= 37% x 12.9% = 0.0477 or 4.77%

Explanation:

a) Windswept, Inc. 2011 Income Statement ($ in millions)

Net sales                                     $8,450

Less: Cost of goods sold              7,240

Less: Depreciation                           400

Earnings before interest and taxes 810

Less: Interest paid                             70

Taxable Income                             $740

Less: Taxes                                     259

Net income                                    $481

b) Windswept, Inc 2010 and 2011 Balance Sheets ($ in millions)

                              2010     2011                                   2010           2011

Cash                    $ 120      $140   Accounts payable $1,110       $1,120

Account rec.          930       780    Long-term debt       840         1,210

Inventory              1480     1520    Common Stock    3,200        3,000

Total                 $2,530  $2,440    Retained Earnings 530            710

Net fixed assets 3,150    3,600      Total Liabilities &

Total assets    $5,680  $6,040                    equity $5,680     $6,040

c) Equity Multiplier is a financial leverage ratio that determines the percentage of a company's assets that is financed by stockholders' equity or debt.  The formula for equity multiplier is total assets divided by stockholders' equity.

d) Retention ratio is the percentage of current period's retained earnings to the net income.  It shows how much the business has retained from income to grow the business further.  It is the opposite of the payout ratio, which measures the percentage of profit paid out to shareholders as dividends.

e) ROA (Return on Assets) measures the profitability of the business in relation to its assets.

f) ROE (Return on Equity) measures the profitability of the business in relation to its equity or net assets.

g) The internal growth rate (g) for a public company is calculated by taking the firm's retained earnings and dividing by total assets, or by using return on assets formula (net income / total assets).

h) The Sustainable growth rate is calculated by multiplying a company's earnings retention rate by its return on equity.

You might be interested in
From a vantage point very close to the track at a stock car race, you hear the sound emitted by a moving car. You detect a frequ
yuradex [85]

Answer:

The speed of the car is 67.77 m/s and it is moving away from the observer.

Explanation:

The apparent frequency is given as

f' = f\dfrac{ [v - vo]}{ [v - vs]}

Here

o is the  observer

s is the source which is car

v is the speed of  sound  = 343 m/s

f = true frequency emitted by the car (when stationary)

f ' = 0.835 f

so

f' = f\dfrac{ [v - vo]}{ [v - vs]}\\0.835 f= f\dfrac{ [v - vo]}{ [v - vs]}\\0.835 = \dfrac{ [343 - 0]}{ [343 - vs]}\\0.835=\frac{343}{343-x}\\x=-67.77 m/s

The speed of the car is 67.77 m/s and it is moving away from the observer.

5 0
3 years ago
Which of the following statements about job applications is false?
Ilia_Sergeevich [38]

Answer:

I would say it is A

Explanation:

i say this because everything is virtual now so therefore there are job applications online

5 0
3 years ago
Read 2 more answers
A forecast that helps direct police officers to areas where crimes are likely to occur based on past data is an example of _____
mihalych1998 [28]

Answer:

D. Predictive Analytics

Explanation:

Predictive analytics is a data mining technique that involves the use of old previous information in the prediction of future activities. It is the use of statistical data and algorithms in determining the likelihood that a future event will occur based on the historical facts found in the statistical data. It is used in identifying patterns and predicting future outcomes and trends based on those identified patterns. An example of this is a forecast that helps police in predicting areas most likely that crime will occur.

3 0
3 years ago
A firm recently replaced an existing piece of machinery with a different model that produces a higher-quality finished product w
MissTica

Answer:

capitalize the new cost as an asset to be amortized over future periods expected to benefit

Explanation:

A capitalized cost is a cost which is added to the cost basis of a fixed asset on a company's balance sheet. This Capitalized costs are sustained from the purchase or construction of fixed assets.  Example of such costs are costs of materials, sales taxes, labor, transportation, and interest incurred to finance the construction of the asset.

This is usually done for items that would be used over a long period of time, therefore the item is capitalized and amortized or depreciated over its future periods.

7 0
3 years ago
Read 2 more answers
The income statement for the Carolina Service Company for the year ended December 31, 2017, appears below. Includes $25,000 of i
KATRIN_1 [288]

Answer:

Earning per share = 2.166

Price earning = 10.15

Times interest earned = 5.4

Explanation:

Common stock outstanding at end =  Shares outstanding  (open) +Shares issued.

                                         = 50000+10000= 60000 outstanding shares (at end)

a.)we know that earning per share =<u> net income - preference dividend</u>

                                                       Common shares outstanding at end

                                          =  ( N#1)    <u>135000  -      5000</u>

                                                                 60000

                                          =  2.166 earning per share

(N#1):To calculate net income we will need statement of changes in equity,Suppose par value of shares  = $10,

we have Beginning equity + net income - Dividend = Equity (end)

      Net Income = 600000+35000-500000

    Net income = 135000

b.) Price earning =  <u>Market value per share </u>  =   <u>22   </u>    =  10.15

                                Earning per share                2.166

c.) Times interest earned =<u> Income before interest and taxes</u> or EBIT

                                              Interest expense

  EBIT = 135000

                                  =     135000 /  25000  = 5.4 times

6 0
3 years ago
Other questions:
  • EDP is trying to decide between two different conveyor belt systems. System A costs $438,000, has a six-year life, and requires
    10·1 answer
  • Obtain estimates of daily relatives for the number of customers at a restaurant for the evening meal, given the following data.
    5·1 answer
  • The effect of bulky or heavy products on transportation costs can make _______ an inappropriate strategy.
    7·1 answer
  • A portfolio consists of three index funds: an equity index, a bond index, and an international index. The portfolio manager chan
    5·1 answer
  • A major factor contributing to the growth in the use of direct marketing IMC efforts is:__________
    9·1 answer
  • A company uses the periodic inventory system and had the following activity during the current monthly period.
    13·1 answer
  • Does each Subway $5 Footlong cost the franchisee more than $5? Subway, the fast food restaurant franchise, recently announced it
    13·1 answer
  • College education provides higher income for the individual but also a more productive and more educated person who will contrib
    14·1 answer
  • 10 points Item Skipped eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 7 Assume Organic Ice Cream Compa
    7·1 answer
  • deluge writing is preparing to launch a new product. the cfo has been asked to present a financing plan to the board. what would
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!