Pb 3-1

DSO
Sales

Pb 3-2

Assets
Notes Pay

Pb 3-3

Px
Assets

20
20,000,000

A|R

DSO*Sales/365
1,095,890

200
5

LTD

25

75
10,000

CL
LTD

Debt Ratio

Marlet Value of Equity

Pb 3-4

EPS
CF PS

1.5
3

Pb 3-5

PM
A/E

3%
2

Pb 3-6

ROA
PM

Pb 3-7

CA
CR

Pb 3-8

A/E
TA T/O

Pb 3-9

CA
CL

Pb 3-10

Debt
Rate

60,000

P/CF

ROE

3
1.5

20%

Quick

1.75

L/A
D/A = 0.5*L/A

1,312,500
Inv
525,000
(CA+x)/(CL+x) =2.0
x=
Quick
1.19
=(CA-Inv)/(CL+x)

600,000
8%

Sales
Total Assets

12%
5%

=ROE/ROA
1.2

1,000
3,000

Sales
Tax rate

375,000
CA-2*CL

3,000,000
40%

EBIT
I
EBT
Tax
NI

Pb 3-11

198,000
48,000 Debt*Rate
150,000 NI/(1-T)
40%
90,000 Sale*PM

TIE

TA T/O
1.5
GPM
(Sales-CGS)/Sales
Liabilities/Asset
40%
Quick
0.8
DSO
36.5
Inv T/O
3.75
Income Statement
Sales
CGS

25%

(partial)
600,000
450,000

=TA T|O *Total Assets

=.75*Sales

Balance sheet
5
6
4
7

Pb 3-12

Cash
A|R
Inventories
Fixed Assets
Total Assets

Quick
Cur Ratio

28,000
60,000
160,000
152,000
400,000

1.4
3

A|P
Long Term Debt
CommonStock
Retained Earnings
Total Liab and Equity

DSO
CA

Quick/Cur ratio =
0.466667 = (Cash+AR)/CA
A|R
258,000

36.5
810,000

15%

Equity
6,000
Shares outstanding

Px
P/E

100
50

TA T/O
A/E

800

24
16

Dupont
ROE

12%

=ROA/PM
=ROE/ROA

2.40 x
1.67

CL
=CR/CA
Inventories =CA- Quick*CL

=(A-E)/A =1-E/A
0.214286

=1-1/(A/E)

262,500

PM

in millions
except Px

3%

0.5

0.428571

2.5

=EBIT/I

4.125

|O *Total Assets

110,000
50,000
140,000
100,000
400,000

3
2 Equity
1

Cash

Sales

=60%*assets
240000

120,000

=365*A|R/DSO

2,580,000