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) 2020 2019 2018 Current assets $ 685 $ 917 $ 773 Other assets 2,417 1,924 1,723 Total assets $ 3,102 $ 2,841 $ 2,496 Current liabilities $ 581 $ 816 $ 714 Long-term liabilities 1,510 995 860 Stockholders’ equity 1,011 1,030 922 Total liabilities and stockholders' equity $ 3,102 $ 2,841 $ 2,496 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 $ 3,054 $ 2,917 Operating income 300 314 Interest expense 88 69 Net income 203 198 Other data: Average number of common shares outstanding 41.7 47.1 Total dividends paid $ 54.0 $ 52.7 Required: Calculate return on investment, based on net income and average total assets, for 2020 and 2019. Calculate return on equity for 2020 and 2019. Calculate working capital and the current ratio for each of the past three years. Calculate earnings per share for 2020 and 2019. If Wiper's stock had a price/earnings ratio of 11 at the end of 2020, what was the market price of the stock? Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. Calculate the dividend payout ratio for 2020. Assume that accounts receivable at December 31, 2020, totaled $313 million. Calculate the number of days' sales in receivables at that date. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. Calculate the times interest earned ratio for 2020 and 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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)
	2020	2019	2018
Current assets	$	685		$	917	$	773
Other assets		2,417			1,924		1,723
Total assets	$	3,102		$	2,841	$	2,496
Current liabilities	$	581		$	816	$	714
Long-term liabilities		1,510			995		860
Stockholders’ equity		1,011			1,030		922
Total liabilities and stockholders' equity	$	3,102		$	2,841	$	2,496

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	$	3,054	$	2,917
Operating income		300		314
Interest expense		88		69
Net income		203		198
Other data:
Average number of common shares outstanding		41.7		47.1
Total dividends paid	$	54.0	$	52.7

Required:

Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
Calculate return on equity for 2020 and 2019.
Calculate working capital and the current ratio for each of the past three years.
Calculate earnings per share for 2020 and 2019.
If Wiper's stock had a price/earnings ratio of 11 at the end of 2020, what was the market price of the stock?
Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
Calculate the dividend payout ratio for 2020.
Assume that accounts receivable at December 31, 2020, totaled $313 million. Calculate the number of days' sales in receivables at that date.
Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
Calculate the times interest earned ratio for 2020 and 2019.

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