WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 $ 793 2,428 $3,221 2019 $1,021 1,935 $2,956 2018 $883 1,734 $2,617 Current assets Other assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity $ 592 1,607 1,022 $3,221 $ 845 1,070 1,041 $2,956 $ 742 942 933 $2,617 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: $3,065 $2,928 325 Sales Operating income Interest expense Net income Other data: 311 99 236 231 Average number of common shares outstanding Total dividends paid 42.8 $ 65.0 48.2 $ 53.8 Requlred: e. Calculate return on investment, based on net income and average total assets, for 2020 and 2019 b. Calculate return on equity for 2020 and 2019. c. Calculate working capital and the current ratio for each of the past three years. 2O20 and 2019

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
$ 793
2,428
2019
$1,021
1,935
$2,956
2018
$ 883
1,734
$2,617
Current assets
Other assets
Total assets
$3,221
Current liabilities
Long-term liabilities
Stockholders' equity
$ 592
1,607
1,022
$3,221
$ 845
1,070
1,041
$2,956
$ 742
942
933
Total liabilities and stockholders' equity
$2,617
WIPER INC.
Selected Income Statement and Other Data
For the year Ended December 31, 2020 and 2819
(in millions)
2020
2019
Income statement data:
Sales
$3,965
311
99
236
$2,928
325
Operating income
Interest expense
Net income
Other data:
Average number of common shares outstanding
Total dividends paid
231
48.2
S 53.8
Required:
a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
b. Calculate return on ecuity for 2020 and 2019.
c. Calculate working capital and the current ratio for each of the past three years.
d. Calculate eamings per share for 2020 and 2019.
e. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock?
t. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
9. Calculate the dividend payout ratio for 2020.
h. Assume that accounts receivabie at December 31, 2020. totaled $324 million. Calculate the number of days' sales in receivables
that date.
1. Calculate Wipers debt ratio and debt/equity ratio at December 31, 2020 and 2019.
Transcribed Image Text: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 $ 793 2,428 2019 $1,021 1,935 $2,956 2018 $ 883 1,734 $2,617 Current assets Other assets Total assets $3,221 Current liabilities Long-term liabilities Stockholders' equity $ 592 1,607 1,022 $3,221 $ 845 1,070 1,041 $2,956 $ 742 942 933 Total liabilities and stockholders' equity $2,617 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2819 (in millions) 2020 2019 Income statement data: Sales $3,965 311 99 236 $2,928 325 Operating income Interest expense Net income Other data: Average number of common shares outstanding Total dividends paid 231 48.2 S 53.8 Required: a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. b. Calculate return on ecuity for 2020 and 2019. c. Calculate working capital and the current ratio for each of the past three years. d. Calculate eamings per share for 2020 and 2019. e. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock? t. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. 9. Calculate the dividend payout ratio for 2020. h. Assume that accounts receivabie at December 31, 2020. totaled $324 million. Calculate the number of days' sales in receivables that date. 1. Calculate Wipers debt ratio and debt/equity ratio at December 31, 2020 and 2019.
236
231
NEt income
Other data:
Average number of common shares outstanding
Total dividends paid
42.8
$ 65.0
48.2
$53.8
Requlred:
a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019.
b. Calculate return on equity for 2020 and 2019.
c. Calculate working capital and the current ratio for each of the past three years.
d. Calculate eamings per share for 2020 and 2019.
e. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock?
f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e.
g. Calculate the dividend payout ratio for 2020.
h. Assume that accounts receivable at December 31, 2020, totaled $324 million. Calculate the number of days' sales in receivables at
that date.
1. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019.
J. Calculate the times interest earned ratio for 2020 and 2019.
Complete this question by entering your answers in the tabs below.
Req A and B
Req C
Req D
Reg E to H
Req I
Reg J
Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. (Round "Debt ratio" to 1 decimal place
and "Debt/equity ratio" to the nearest whole percent.)
2020
2019
Debt.ratio
Debtlequity ratio
< Req E to H
Req J >
Transcribed Image Text:236 231 NEt income Other data: Average number of common shares outstanding Total dividends paid 42.8 $ 65.0 48.2 $53.8 Requlred: a. Calculate return on investment, based on net income and average total assets, for 2020 and 2019. b. Calculate return on equity for 2020 and 2019. c. Calculate working capital and the current ratio for each of the past three years. d. Calculate eamings per share for 2020 and 2019. e. If Wiper's stock had a price/earnings ratio of 12 at the end of 2020, what was the market price of the stock? f. Calculate the cash dividend per share for 2020 and the dividend yield based on the market price calculated in part e. g. Calculate the dividend payout ratio for 2020. h. Assume that accounts receivable at December 31, 2020, totaled $324 million. Calculate the number of days' sales in receivables at that date. 1. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. J. Calculate the times interest earned ratio for 2020 and 2019. Complete this question by entering your answers in the tabs below. Req A and B Req C Req D Reg E to H Req I Reg J Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2020 and 2019. (Round "Debt ratio" to 1 decimal place and "Debt/equity ratio" to the nearest whole percent.) 2020 2019 Debt.ratio Debtlequity ratio < Req E to H Req J >
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