Question

Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 Current assets $ 764 Other assets 2,424 Total assets $3,188 Current liabilities $ 588 Long-term liabilities 1,582 Stockholders' equity 1,018 Total liabilities and stockholders' equity $3,188 2019 $ 981 1,931 $2,912 $ 841 1,034 1,037 $2,912 2018 $ 843 1,730 $2,573 $ 734 910 929 $2,573 2019 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 Income statement data: Sales $3,061 Operating income Interest expense 95 Net income 224 Other data: Average number of common shares outstanding 42. 4 Total dividends paid $ 61.0 307 $2,924 321 76 219 47.8 $ 53.4

Answer 1

Wiper Inc. Requirmente. (in million) Market Price = PE ratio x EPS EPS = Net Income / Avg. outstanding no. of shares = 224 / 42.4 = $5.28 Market Price = 12 x $5.28 = $63.36 Requirement f. Cash Dividend per share = Total Dividends paid / Outstanding shares = $61 / 42.4 = $1.44 Dividend Yield = Dividend per share / Market Price per share = $1.44 / $63.36 = 2.27% Requirement g. Dividend Payout Ratio = Dividend per share / EPS = $1.44 / $5.28 = 27% Requirement H. Days Sales in Receivables = 365 / Sales / Avg. Receivables = 365 / 3061 / 320 = 365 / 9.57 = 38.14 Days Requirement I. Debt Ratio = Total Liabilities/Total Assets 2020 = (588 + 1582 ) / 3188 = 0.681 2019 = (841 + 1034)/2912 = 0.644 Debt Equity Ratio = Total Liabilities/Total Equity 2020 = (588 + 1582) / 1018 = 2.13 2019 = (841 + 1034 ) / 1037 = 1.81 Requirement j. Times Interest earned = Operating Income / Interest Expense 2020 = 307/95 = 3.23 2019 = 321 / 76 = 4.22