STATIC

P11-09 Presented here are summarized data from the balance sheets and income statements of Wiper, Inc.:

Condensed Balance Sheets

2011 2010 2009

Current assets 677.00 891.00 736.00
Other assets 2,413.00 1,920.00 1,719.00
3,090.00 2,811.00 2455
TRUE TRUE TRUE

Current liabilities 562.00 803.00 710

Long-term liabilities 1,521.00 982.00 827
Owners' equity 1,007.00 1,026.00 918
3,090.00 2,811.00 2455
1.00 1.00 1.00

Selected Income Statement and Other Data

Income statement data: 2011 2010

Sales 3,050.00 2,913.00
Operating income 296.00 310.00
Interest expense 84.00 65.00
Net income 192.00 187.00
Other data:
Average number of common shares outstanding 41.30 46.70
Total dividends paid 50.00 52.30

a) Calculate return on investment, based on net income and average total assets, for 2011 and 2010.
2011 2010
Net Income 192.00 187.00
Average Total Assets 2,950.50 2,633.00

Return on Investment 6.50 7.10

b) Calculate return on equity for 2011 and 2010.

2011 2010
Net Income 192.00 187.00
Average Stkholders Equ 1,016.50 972.00

Return on equity 18.90 19.20

c) Calculate working capital and the current ratio for each of the past three years.
2011 2010 2009
Working capital 115.00 88.00 26.00
 Current ratio 1.2 1.1 1

d) Calculate earnings per share for 2011 and 2010.

2011 2010
Earnings per share 4.65 4

e) If Wiper's stock had a price/earnings ratio of 13 at the end of 2011, what was the market price of the stock?
13.00

Market price 60.45

f) Calculate the cash dividend per share for 2011 and the dividend yield based on the market price calculated in r

Cash dividends per share 1.21

Dividend yield 2.00 %

g) Calculate the dividend payout ratio for 2011.

Dividend payout ratio 26.04 %

h) Assume that accounts receivable at December 31, 2011, totaled $309 million.
309.00
Calculate the number of days' sales in receivables at that date. Use 365 days a year
365
Receivable turnover ratio 9.87

Number of days 37.00

i) Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2011 and 2010.
2011 2010
Debt ratio 67.4 63.5
Debt/equity ratio 206.9 174.00

j) Calculate the times interest earned factor for 2011 and 2010.
2011 2010
Times interest earned 3.5 4.8 (answer graded on Connect)

3.3 3.9

Explanation

a) 2011 ROI 192.00 3,050.00 3,050.00 3,090.00

6.30 margin 1.03 turnover
 2010 ROI 187.00 2,913.00 2,913.00 2,455.00
6.42 margin 1.11 turnover

b) 2011 ROE 192.00 1,007.00 1,026.00 18.90

2010 ROE 187.00 918 1,026.00 19.20

c) 2011 2010 2009

Current assets 677.00 891.00 736.00
Current liabilities -562.00 -803.00 -710.00

Working capital 115.00 88.00 26.00

Current ratio (current assets / current liabilities)

1.20 1.10 1.00

d) 2011 EPS 192.00 41.30 4.65

2010 EPS 187.00 46.70 4.00

e) 13.00 ??? 4.65

Market price = 60.45

f) Cash dividends per share = 50.00 million total cash dividend 41.30

Dividend yield = 1.21 cash dividend per share / 60.45 market price per share) =

g) Dividend payout ratio = 1.21 dividend per share 4.65 earnings per share)

h) Average days' sales = 3,050.00 365 8.36

Number of days' sales in accounts receivable = 309.00 8.36

i) 12/31/11 Debt ratio = 562.00 1,521.00 3,090.00 67.4

12/31/10 Debt ratio = 803.00 982.00 2,811.00 63.5

12/31/11 Debt Equ ratio = 562.00 1,521.00 1,007.00 206.9

12/31/10 Debt Equ ratio = 803.00 982.00 1,026.00 174.00

j) For 2011: = 296.00 84.00 3.5 times

For 2010: = 310.00 65.00 4.8 times
 ALGO
atements of Wiper, Inc.: P11-09

0.00 0.00

ts, for 2011 and 2010. a)

b)

c)
 d)

the market price of the stock? e)

on the market price calculated in requirement (e). f)

g)

h)

i)

j)

raded on Connect)

2,811.00 a)
6.5
 2,811.00
7.1

b)

c)

d)

e)

million weighted average number of shares outstanding) 1.21 f)

market price per share) = 2.00

earnings per share) 26 g)

h)

37

i)

j)
Presented here are summarized data from the balance sheets and income statements of Wiper, Inc.:

Condensed Balance Sheets

2011 2010 2009

Current assets 542.00 980.00 662.00
Other assets 1,930.00 2,112.00 1,547.00
2,472.00 3,092.00 2209
TRUE TRUE TRUE

Current liabilities 450.00 883.00 639

Long-term liabilities 1,217.00 1,080.00 744

Owners' equity 805.00 1,129.00 826

1.00 1.00 1.00

Selected Income Statement and Other Data

Income statement data: 2011 2010

Sales 2,440.00 3,204.00
Operating income 237.00 341.00
Interest expense 67.00 72.00
Net income 154.00 206.00 0.00
Other data:
Average number of common shares outstanding 33.00 51.40
Total dividends paid 40.00 58.00

Calculate return on investment, based on net income and average total assets, for 2011 and 2010.
2011 2010
Net Income 154.00 206.00
Average Total Assets 2,782.00 2,650.50

Return on Investment 5.50 7.80

Calculate return on equity for 2011 and 2010.

2011 2010
Net Income 154.00 206.00
Average Stkholders Equ 967.00 977.50

Return on equity 15.90 21.10

Calculate working capital and the current ratio for each of the past three years.
2011 2010 2009
Working capital 92.00 97.00 23.00
 Current ratio 1.2 1.1 1

Calculate earnings per share for 2011 and 2010.

2011 2010
Earnings per share 4.67 4.01

If Wiper's stock had a price/earnings ratio of 13 at the end of 2011, what was the market price of the stock?
10.00

Market price 46.7

Calculate the cash dividend per share for 2011 and the dividend yield based on the market price calculated in requirement

Cash dividends per share 1.21

Dividend yield 2.59 %

Calculate the dividend payout ratio for 2011.

Dividend payout ratio 25.97 %

Assume that accounts receivable at December 31, 2011, totaled $309 million.
247.00
Calculate the number of days' sales in receivables at that date. Use 365 days a year
365
Receivable turnover ratio 9.88

Number of days 37.00

Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2011 and 2010.
2011 2010
Debt ratio 67.4 63.5
Debt/equity ratio 207.1 173.90

Calculate the times interest earned factor for 2011 and 2010.
2011 2010
Times interest earned 3.5 4.7 (answer graded on Connect)

3.3 3.9

Explanation

2011 ROI 154.00 2,440.00 2,440.00 2,472.00 3,092.00

6.31 margin 0.88 turnover 5.6
 2010 ROI 206.00 3,204.00 3,204.00 2,209.00 3,092.00
6.43 margin 1.21 turnover 7.8

2011 ROE 154.00 805.00 1,129.00 15.90

2010 ROE 206.00 826 1,129.00 21.10

2011 2010 2009

Current assets 542.00 980.00 662.00
Current liabilities -450.00 -883.00 -639.00

Working capital 92.00 97.00 23.00

Current ratio (current assets / current liabilities)

1.20 1.10 1.00

2011 EPS 154.00 33.00 4.67

2010 EPS 206.00 51.40 4.01

10.00 ??? 4.67

Market price = 46.7

Cash dividends per share = 40.00 million total cash dividend 33.00 million

Dividend yield = 1.21 cash dividend per share / 46.7 market price per share) =

Dividend payout ratio = 1.21 dividend per share 4.67 earnings per share)

Average days' sales = 2,440.00 365 6.69

Number of days' sales in accounts receivable = 247.00 6.69 37.00

12/31/11 Debt ratio = 450.00 1,217.00 2,472.00 67.4

12/31/10 Debt ratio = 883.00 1,080.00 3,092.00 63.5

12/31/11 Debt Equ ratio = 450.00 1,217.00 805.00 207.1 %

12/31/10 Debt Equ ratio = 883.00 1,080.00 1,129.00 173.90 %

For 2011: = 237.00 67.00 3.5 times

For 2010: = 341.00 72.00 4.7 times
f Wiper, Inc.:

0.00
 price of the stock?

ket price calculated in requirement (e).

 weighted average number of shares outstanding) 1.21

ce per share) = 2.59

26