Question

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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) Current assets Other assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity 2019 $ 915 1,923 $2,838 2018 $ 763 1,722 $2,485 2020 $ 683 2,416 $3,099 $ 576 1,513 1,010 $3,099 715 Current S. cong-terilities $ 826 1,003 1,029 $2,838 $2,485 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions 2020 2019 $3,053 299 87 Income statement data: Sales Operating income Interest expense Net income Other data Average number of common shares outstanding Total dividends caid $2,916 313 68 195 200 5 53.0 5 52.6 < Prev 5 of 5 :

Answer 1

(in million )

a.Return on Investment = Net Income / Avg.Total Assets

2020 = 200 / (3099 + 2838 ) / 2 = 200 / 2969 = 6.74%

2019 = 195 / ( 2838 + 2485 ) / 2 = 195 / 2662 = 7.32%

b.Return on Equity = Net Income / Avg. Total Equity

2020 = 200 / ( 1010 + 1029 ) / 2 = 200 / 1020 = 19.61%

2019 = 195 / ( 1029 + 921 ) / 2 = 195 / 975 = 20%

c.Working Capital = Current Assets - Current Liabilities

2020 = 683 - 576 = 107

2019 = 915 - 806 = 109

Current Ratio = Current Assets / Current Liabilities

2020 = 683 / 576 = 1.19

2019 = 915 / 806 = 1.14

d.Earning per share = Net Income / Outstanding Shares

2020 = 200 / 41.6 = $4.81

2019 = 195 / 47 = $4.15

e.Market Price of Stock 2020 = PE Ratio x EPS = 13 x $4.81 = $62.53

f.Dividend per share 2020 = Dividend / Outstanding Shares = $53 / 41.6 = $1.27 per share

Dividend yield 2020 = Dividend per share / Market price = $1.27 / $62.53 = 2.03%

g.Dividend payout ratio 2020 = Dividend per share / Earning per share = $1.27 / $4.81 = 26.4%

h.Days Sales Receivables 2020 = 365 / (Sales / Receivables ) = 365 / ( 3053 / 312 ) = 365 / 9.79 = 37.28 Days

i.Debt Ratio = Total Liabilities / Total Assets

2020 = ( 576 + 1513 ) / 3099 = 0.674

2019 = ( 806 + 1003 ) / 2838 = 0.637

Debt Equity = Total Liabilities / Total Equity

2020 = ( 576 + 1513 ) / 1010 = 2.06

2019 = ( 806 + 1003 ) / 1029 = 1.76

j.Times Interest Earned = Operating Income / Interest Expense

2020 = 299 / 87 = 3.44 times

2019 = 313 / 68 = 4.6 times