Exhibit 8.1 The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2012 Cash and securities $ 1,588.0 Accounts receivable 9,510.0 Inventories 13,700.0 Total current assets $24,798.0 Net plant and equipment 15,272.0 Total assets $40,070.0 Liabilities and Equity Accounts payable $ 7,420.0 Notes payable 5,030.0 Accruals 4,030.0 Total current liabilities $16,480.0 Long-term bonds 10,320.0 Total debt $26,800.0 Common stock 3,720.0 Retained earnings 9,550.0 Total common equity $13,270.0 Total liabilities and equity $40,070.0 Income Statement (Millions of $) 2012 Net sales $59,700.0 Operating costs except depr'n $54,318.0 Depreciation $ 1,229.0 Earnings bef int and taxes (EBIT) $ 4,153.0 Less interest 249.2 Earnings before taxes (EBT) $ 3,903.8 Taxes $ 1,522.5 Net income $ 2,381.3 Other data: Shares outstanding (millions) 180.00 Common dividends (Millions of $) $ 505.72 Int rate on notes payable & L-T bonds 6.00% Federal plus state income tax rate 39% Year-end stock price $77.05 Refer to Exhibit 8.1. What is the firm's debt ratio? Group of answer choices 66.88% 59.88% 47.91% 42.81% 53.58%
Exhibit 8.1 The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2012 Cash and securities $ 1,588.0 Accounts receivable 9,510.0 Inventories 13,700.0 Total current assets $24,798.0 Net plant and equipment 15,272.0 Total assets $40,070.0 Liabilities and Equity Accounts payable $ 7,420.0 Notes payable 5,030.0 Accruals 4,030.0 Total current liabilities $16,480.0 Long-term bonds 10,320.0 Total debt $26,800.0 Common stock 3,720.0 Retained earnings 9,550.0 Total common equity $13,270.0 Total liabilities and equity $40,070.0 Income Statement (Millions of $) 2012 Net sales $59,700.0 Operating costs except depr'n $54,318.0 Depreciation $ 1,229.0 Earnings bef int and taxes (EBIT) $ 4,153.0 Less interest 249.2 Earnings before taxes (EBT) $ 3,903.8 Taxes $ 1,522.5 Net income $ 2,381.3 Other data: Shares outstanding (millions) 180.00 Common dividends (Millions of $) $ 505.72 Int rate on notes payable & L-T bonds 6.00% Federal plus state income tax rate 39% Year-end stock price $77.05 Refer to Exhibit 8.1. What is the firm's debt ratio? Group of answer choices 66.88% 59.88% 47.91% 42.81% 53.58%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Exhibit 8.1
Thebalance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
Refer to Exhibit 8.1. What is the firm's debt ratio?
The
| Balance Sheet (Millions of $) | |
| Assets |
2012
|
| Cash and securities |
$ 1,588.0
|
| Accounts receivable |
9,510.0
|
| Inventories |
13,700.0
|
| Total current assets |
$24,798.0
|
| Net plant and equipment |
15,272.0
|
| Total assets |
$40,070.0
|
| Liabilities and Equity | |
| Accounts payable |
$ 7,420.0
|
| Notes payable |
5,030.0
|
| Accruals |
4,030.0
|
| Total current liabilities |
$16,480.0
|
| Long-term bonds |
10,320.0
|
| Total debt |
$26,800.0
|
| Common stock |
3,720.0
|
|
9,550.0
|
|
| Total common equity |
$13,270.0
|
| Total liabilities and equity |
$40,070.0
|
| Income Statement (Millions of $) |
2012
|
| Net sales |
$59,700.0
|
| Operating costs except depr'n |
$54,318.0
|
|
$ 1,229.0
|
|
| Earnings bef int and taxes (EBIT) |
$ 4,153.0
|
| Less interest |
249.2
|
| Earnings before taxes (EBT) |
$ 3,903.8
|
| Taxes |
$ 1,522.5
|
| Net income |
$ 2,381.3
|
| Other data: | |
| Shares outstanding (millions) |
180.00
|
| Common dividends (Millions of $) |
$ 505.72
|
| Int rate on notes payable & L-T bonds |
6.00%
|
| Federal plus state income tax rate |
39%
|
| Year-end stock price |
$77.05
|
Refer to Exhibit 8.1. What is the firm's debt ratio?
Group of answer choices
66.88%
59.88%
47.91%
42.81%
53.58%
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