The balance sheet and income statement shown below are for Koski 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 $) 2021 Assets Cash and securities $ 6,000 Accounts receivable 15,000 Inventories 15,000 Total current assets $ 36,000 Net plant and equipment 24,000 Total assets $ 60,000 Liabilities and Equity Accounts payable $ 18,744 Accruals 9,656 Notes payable 6,000 Total current liabilities $ 34,400 Long-term bonds 10,000 Total liabilities $ 44,400 Common stock 3,900 Retained earnings 11,700 Total common equity $ 15,600 Total liabilities and equity $ 60,000 Income Statement (Millions of $) 2021 Net sales $ 108,000 Operating costs except depreciation 100,440 Depreciation 1,920 Earnings before interest and taxes (EBIT) $ 5,640 Less interest 960 Earnings before taxes (EBT) $ 4,680 Taxes (25%) 1,170 Net income $ 3,510 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $1,228.50 Int. rate on notes payable & L-T bonds 6% Federal plus state income tax rate 25% Year-end stock price $84.24 What is the firm's ROA? Do not round your intermediate calculations. Please explain the process and show calculations.
The balance sheet and income statement shown below are for Koski 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 $) 2021 Assets Cash and securities $ 6,000 Accounts receivable 15,000 Inventories 15,000 Total current assets $ 36,000 Net plant and equipment 24,000 Total assets $ 60,000 Liabilities and Equity Accounts payable $ 18,744 Accruals 9,656 Notes payable 6,000 Total current liabilities $ 34,400 Long-term bonds 10,000 Total liabilities $ 44,400 Common stock 3,900 Retained earnings 11,700 Total common equity $ 15,600 Total liabilities and equity $ 60,000 Income Statement (Millions of $) 2021 Net sales $ 108,000 Operating costs except depreciation 100,440 Depreciation 1,920 Earnings before interest and taxes (EBIT) $ 5,640 Less interest 960 Earnings before taxes (EBT) $ 4,680 Taxes (25%) 1,170 Net income $ 3,510 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $1,228.50 Int. rate on notes payable & L-T bonds 6% Federal plus state income tax rate 25% Year-end stock price $84.24 What is the firm's ROA? Do not round your intermediate calculations. Please explain the process and show calculations.
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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The balance sheet and income statement shown below are for Koski 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 $) | 2021 | |||
| Assets | ||||
| Cash and securities | $ | 6,000 | ||
| Accounts receivable | 15,000 | |||
| Inventories | 15,000 | |||
| Total current assets | $ | 36,000 | ||
| Net plant and equipment | 24,000 | |||
| Total assets | $ | 60,000 | ||
| Liabilities and Equity | ||||
| Accounts payable | $ | 18,744 | ||
| Accruals | 9,656 | |||
| Notes payable | 6,000 | |||
| Total current liabilities | $ | 34,400 | ||
| Long-term bonds | 10,000 | |||
| Total liabilities | $ | 44,400 | ||
| Common stock | 3,900 | |||
| 11,700 | ||||
| Total common equity | $ | 15,600 | ||
| Total liabilities and equity | $ | 60,000 | ||
| Income Statement (Millions of $) | 2021 | |||
| Net sales | $ | 108,000 | ||
| Operating costs except depreciation | 100,440 | |||
| Depreciation | 1,920 | |||
| Earnings before interest and taxes (EBIT) | $ | 5,640 | ||
| Less interest | 960 | |||
| Earnings before taxes (EBT) | $ | 4,680 | ||
| Taxes (25%) | 1,170 | |||
| Net income | $ | 3,510 | ||
| Other data: | ||||
| Shares outstanding (millions) | 500.00 | |||
| Common dividends (millions of $) | $1,228.50 | |||
| Int. rate on notes payable & L-T bonds | 6% | |||
| Federal plus state income tax rate | 25% | |||
| Year-end stock price | $84.24 |
What is the firm's ROA? Do not round your intermediate calculations.
Please explain the process and show calculations.
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