Question

Presented here are summarized data from the balance sheets and income statements of Wiper Inc.:

WIPER INC.
Condensed Balance Sheets
December 31, 2020, 2019, 2018
(in millions)
	2020			2019			2018
Current assets	$	793		$	1,021		$	883
Other assets		2,428			1,935			1,734
Total assets	$	3,221		$	2,956		$	2,617
Current liabilities	$	592		$	845		$	742
Long-term liabilities		1,607			1,070			942
Stockholders’ equity		1,022			1,041			933
Total liabilities and stockholders' equity	$	3,221		$	2,956		$	2,617

WIPER INC.
Selected Income Statement and Other Data
For the year Ended December 31, 2020 and 2019
(in millions)
	2020			2019
Income statement data:
Sales	$	3,065		$	2,928
Operating income		311			325
Interest expense		99			80
Net income		236			231
Other data:
Average number of common shares outstanding		42.8			48.2
Total dividends paid	$	65.0		$	53.8

Required:

1. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock?
2. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
3. Calculate the dividend payout ratio for 2020.
4. Assume that accounts receivable at December 31, 2020, totaled $324 million. Calculate the number of days' sales in receivables at that date.
5. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
6. Calculate the times interest earned ratio for 2020 and 2019.

asap will be graded

Answer 1

	Wiper Inc.
Q1.
Sr. No.	Particulars	Amounts in Mn. $
1	Price earning ratio (in times)	12
2	Given Net Income	236
3	Shares Outstanding	42.8
4	EPS (2/3)	5.514
5	Market price per share ($)	66.168
6	Total dividends paid	65.5
7	Dividend Per share ($) (6/3)	1.5304
8	Dividend Yield per share (7/5*100)	2.31%
Q2.
Sr. No.	Particulars	Amounts in Mn. $
1	Total sales for the year 2020	3,065.00
2	Accounts Receivable	324.00
3	Trade Receivable Turnover Ratio - in times (1/2)	9.46
4	Days Outstanding (365/9.46)	38.58
	i.e. 38.58 days outstanding
Q3
Sr. No.	Particulars	Amounts in Mn. $
1	Total Debt:
2	Long term liability	1,607.00
3	Current Liability	592.00
4	Total (2+3)	2,199.00
5	Equity	1,022.00
6	Total Asset	3,221.00
7	Debt Ratio (4/6)	68.27072%
	Alternatively it can be expressed as 2.199:3.211
8	Debt Equity Ratio	2.15
	Alternatively it can be expressed as 2.199:1.022
Q4
Sr. No.	Particulars	Amounts in Mn. $
1	Net Income	236.00
2	Interest Cost	99.00
3	Total Income before interest	335.00
4	Interest coverage ratio - in times (3/2)	3.38
	This ratio measures the ability of organization to service its interest costs