Question

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67- What is the cash coverage ratio for 2015?

Deep Falls Timber 2015 Income Statement $642.100 Net sales Cost of goods sold Depreciation EBIT Interest Taxable income Taxes Net income Dividends 409,800 138,400 $ 93,900 15,600 $ 78,300 27,500 $ 50,800 $12,700 Deep Falls Timber Balance Sheets as of December 31, 2014 and 2015 2014 Cash Accounts receivable 2015 $ 32,300 50,700 70,500 $ 46,900 58,300 75,800 2015 $ 58,900 20,000 134,700 2014 | $ 61,200 30,000 164,500 Inventory ory Accounts payable Notes payable Long-term debt Common stock and paid-in surplus ($1 par value) Retained earings Total liabilities & owners' equity Net fixed assets 504,500 461,000 wue) 220,000 224,400 200,000 186,300 Total assets $658,000 $642,000 $658,000 $642,000

A. 11.06

B. 6.02

C. 13.79

D. 14.89

E. 8.78

68- What are the values of the three components of the DuPont identity for 2015?

Deep Falls Timber 2015 Income Statement $642.100 Net sales Cost of goods sold Depreciation EBIT Interest Taxable income Taxes Net income Dividends 409,800 138,400 $ 93,900 15,600 $ 78,300 27,500 $ 50,800 $12,700 Deep Falls Timber Balance Sheets as of December 31, 2014 and 2015 2014 Cash Accounts receivable 2015 $ 32,300 50,700 70,500 $ 46,900 58,300 75,800 2015 $ 58,900 20,000 134,700 2014 | $ 61,200 30,000 164,500 Inventory ory Accounts payable Notes payable Long-term debt Common stock and paid-in surplus ($1 par value) Retained earings Total liabilities & owners' equity Net fixed assets 504,500 461,000 wue) 220,000 224,400 200,000 186,300 Total assets $658,000 $642,000 $658,000 $642,000

A. 7.91%; 1.0248; 1.4806

B. 8.57%; 1.0248; .6754

C. 7.91%; .9758; 1.4806

D. 11.43%; .9758; .6754

E. 11.43%; 1.0248; 1.4806

69- Deep Falls Timber stock sold for $6.50 a share as of 2015. What was the price-earnings ratio at that time?

Deep Falls Timber 2015 Income Statement $642.100 Net sales Cost of goods sold Depreciation EBIT Interest Taxable income Taxes Net income Dividends 409,800 138,400 $ 93,900 15,600 $ 78,300 27,500 $ 50,800 $12,700 Deep Falls Timber Balance Sheets as of December 31, 2014 and 2015 2014 Cash Accounts receivable 2015 $ 32,300 50,700 70,500 $ 46,900 58,300 75,800 2015 $ 58,900 20,000 134,700 2014 | $ 61,200 30,000 164,500 Inventory ory Accounts payable Notes payable Long-term debt Common stock and paid-in surplus ($1 par value) Retained earings Total liabilities & owners' equity Net fixed assets 504,500 461,000 wue) 220,000 224,400 200,000 186,300 Total assets $658,000 $642,000 $658,000 $642,000

A. 17.12

B. 29.94

C. 12.82

D. 28.15

E. 19.64

70- Deep Falls Timber stock sold for $6.50 a share as of 2015. What was the price-earnings ratio at that time?

Deep Falls Timber 2015 Income Statement $642.100 Net sales Cost of goods sold Depreciation EBIT Interest Taxable income Taxes Net income Dividends 409,800 138,400 $ 93,900 15,600 $ 78,300 27,500 $ 50,800 $12,700 Deep Falls Timber Balance Sheets as of December 31, 2014 and 2015 2014 Cash Accounts receivable 2015 $ 32,300 50,700 70,500 $ 46,900 58,300 75,800 2015 $ 58,900 20,000 134,700 2014 | $ 61,200 30,000 164,500 Inventory ory Accounts payable Notes payable Long-term debt Common stock and paid-in surplus ($1 par value) Retained earings Total liabilities & owners' equity Net fixed assets 504,500 461,000 wue) 220,000 224,400 200,000 186,300 Total assets $658,000 $642,000 $658,000 $642,000

A. 17.12

B. 29.94

C. 12.82

D. 28.15

E. 19.64

Answer 1

Answer to Question 67:

Cash Coverage Ratio = (EBIT + Depreciation) / Interest
Cash Coverage Ratio = ($93,900 + $138,400) / $15,600
Cash Coverage Ratio = 14.89

Answer to Question 68:

Profit Margin = Net Income / Net Sales
Profit Margin = $50,800 / $642,100
Profit Margin = 7.91%

Total Asset Turnover = Net Sales / Total Assets
Total Asset Turnover = $642,100 / $658,000
Total Asset Turnover = 0.9758

Equity Multiplier = Total Assets / Total Equity
Equity Multiplier = Total Assets / (Common Stock and Paid-in Surplus + Retained Earnings)
Equity Multiplier = $658,000 / ($220,000 + $224,400)
Equity Multiplier = 1.4806

Answer to Question 69:

Number of Shares Outstanding = Common Stock and Paid-in Surplus / Par Value
Number of Shares Outstanding = $220,000 / $1
Number of Shares Outstanding = 220,000

Earnings per share = Net Income / Number of Shares Outstanding
Earnings per share = $50,800 / 220,000
Earnings per share = $0.23091

Price-Earnings Ratio = Market Price per share / Earnings per share
Price-Earnings Ratio = $6.50 / $0.23091
Price-Earnings Ratio = 28.15