Chapter 2: 23BP (page 52)
Landers Nursery and Garden Stores has current assets of
issued 25,000 shares of common stock. Compute book value (net worth)
per share.
The book value per share of Landers Nursery and Garden Stores is $5.2.
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Assume the following data for Cable Corporation and Multi-Media Inc.
Capable corporation | Muli-media inc | |
Net income | \(31,200 | \)140,000 |
Sales | 317,000 | 2,700,000 |
Total assets | 402,000 | 965,000 |
Total debts | 163,000 | 542,000 |
Stockholder’s equity | 239,000 | 423,000 |
Compute the return on stockholders’ equity for both firms using Ratio 3a. Which firm has the higher return?
Nova Electrics anticipates cash flow from operating activities of
competitive within the industry. Common stock dividends are projected at
a. What is the firm’s projected free cash flow for the year 20X1?
b. What does the concept of free cash flow represent?
What is the difference between book value per share of common stock and market value per share? Why does this disparity occur?
What is the difference between accumulated depreciation and depreciation expense? How are they related?
Prepare an income statement for Virginia Slim Wear. Take your calculations all the way to computing earnings per share.
Sales | 1,360,000 |
Shares outstanding | 104,000 |
Cost of goods sold | 700,000 |
Interest expenses | 34,000 |
Selling and administration expenses | 49,000 |
Depreciation expenses | 23,000 |
Preferred stock dividend | 86,000 |
Taxes | 100,000 |
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