Question

WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 2019 2018 $ 843 1,730 $2,573 $764 2,424 $ 981 Current assets Other assets 1,931 Total assets $3,188 $2,912 $ 588 $ 841 Current liabilities $ 734 Long-term liabilities Stockholders' equity 1,582 1,018 1,034 1,037 910 929 Total liabilities and stockholders ' equity $2,573 $3,188 $2,912 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 $3,061 $2,924 Operating income Interest expense 307 321 95 76 Net income 224 219 Other data: Average number of common shares outstanding Total dividends paid 42.4 47.8 $ 61.0 $53.4

Answer 1

Amount in Millions $ 2020 2019 a) Reurn on Investment = Net Income/Average Total Assets Net Income Average Total Assets 224 219 (2912+3188)/2 (2573+2912)/2 3050 2742.5 (224/3050)*100 (219/2742.5)*100 7.34 7.985414768 Return on Investment 2020 2019 b) Return on Equity = Net Income/Shareholders Equity Net Income Shareholders Equity Return on Equity 224 219 1018 1037 = (224/1018)*100 (219/1037)*100 22.00 21.12

2020 2019 2018 c) Working Capital = Current Assets - Current Laibilties 843-734 764-588 176 981-841 140 109 Current Ratio = Current Assets/Current Liabilities 764/588 1.30 981/841 1.17 843/734 1.15 2020 2019 Earnings per share = Net Income/Average Number of Shares d) outstanding 224/42.4 5.28 219/47.8 4.58 2020 12 e) Price Earnings Ratio Market Price/Earnings per Share Market Price 12 12*Earnings Per Share 12*5.28 63.36

2020 Dividend Per Share = Total dividends Paid/Average number of shares f) Outstanding 61/42.4 1.44 Dividend Yield based on market price = Dividend per share/stock price per share 1.44/63.36 0.02 2020 Dividend Payout Ratio = Dividend per g) share/Earnings per share 1.44/5.28 0.27 2020 8.39 h) Sales per day=Total Sales /365 Accounts Receivable 320 N.o of days sales Receivable at that day = accounts Receivable / Sales per day 320/8.39 38.14 38 days

2020 2019 Debt Ratio - Total laibilities/ Total i) Assets Total liabilities 841+1034 588+1582 2170 1875 Total Assets 3188 2912 Debt Ratio 2170/3188 1.47 1875/2912 1.55 Debt Equity Ratio = Total Liabilities/Shareholder Equity Total liabilities = 588+1582 841+1034 2170 1875 Shareholder Equity 1018 1037 Debt Ratio 2170/1018 2.13 1875/1037 1.81

2020 2019 Times Interest Earned Ratio = EBIT/ J) Interest Net income Interest EBIT= Net Income + Interest 219 76 224 95 224+95 319 319/95 3.36 219+76 295 295/76 Times Interest Earned Ratio 3.88