here is all the info I have Worldwide Widget Manufacturing, Inc. Balance Sheet a

Question

here is all the info I have

Worldwide Widget Manufacturing, Inc. Balance Sheet as of December 31, 2015 and 2014 (in millions of dollars) 2015 2014 2015 2014 Assets Current assets Liabilities and Equity Current liabilities: Cash and marketable Accounts receivable Inventory 427 322 Accrued wages and 309 $257 taxes 259 Accounts payable 381 b 815-797 Notes payable $ 492 421 Total $1,542 $1,378 Total $1,182 1,934 3,116 $997 Fixed assets Long-term debt: 59 2,956 Gross plant and equipment $2,817 Total Less: Depreciation3 Net plant and equipment Other long-term assets 368 254 Stockholders' equity: $2,872 $2,563 Preferred stock -521 $ 30 $30 (30 million shares) Common stock and paid-in surplus (250 million shares) Retained earnings 487 300e. ? 1.489 1142 $1,819 $1,472 $4,935 $4428 422 $3,050 Total Equity Total FA Total assets $4.935 $4,428 Total liabilities and equity a. Accounts receivable for 2015 300 b. Accounts payable for 2014 319 c. Gross plant and equipment for 2015e 5340 d. Long term debt for 2014 151 300 e. Common stock and paid-in surplus (250 million shares) for 2014 f. Total FA for 2015 Graded Project

Explanation / Answer

27%

Working Note for ratio Calculation

A Ratio For Company For Industry Comparison Current Ratio 1.3 times 2.2 times Lower Quick Ratio o.6 times 1.1 times Lower Cash Ratio 0.4 times 0.35 times Higher Inventory Turnover Ratio 2 times 2 times or 1 times equal Day's sales in inventory 182.5 Days 135 days or 335 dayes higher Average Payment Period 2.06 days 110 days lower Sales to working capital 6.6 times 3 times higher Total Asset turnover 0.33 times 0.6 times lower Debt to Equity' 1.71 times 1.1 times higher Profit Margin 28% 16.50% higher Gross Profit Margin 68% 48.13% higher ROA 11% 8.78% higher ROE 32% 19.45% higher Dividend Payout 34% 32% higher B. Computation of Company Internal Growth rate ROA i.e. Retunr on Asset b- retention ratio ( 1- dividend payout ratio ROA= 11% b= ( 1-dividend ratio)= (1-0.34)= 0.66 Internal Growth rate = ROA* b/1-(ROA*b)= (0.11*0.66)/1-(0.11*0.66) 8% Hence IRR= 8% Computation of Company Suistanable Growth rate ROE i.e. Retunr on Equity b- retention ratio ( 1- dividend payout ratio ROE=32% b= ( 1-dividend ratio)= (1-0.34)= 0.66 Internal Growth rate = ROA* b/1-(ROA*b)= (0.32*0.66)/1-(0.32*0.66)

27%

Working Note for ratio Calculation

Computation of Current Ratio Detail 2015 Current Asset $1,542.00 Current Liability $1,182.00 Current Ratio 1.3 Ccurrent Asset/Current Liability Computation ofLiquid ratio Detail 2015 Liquid Asset= ( Cash & Marktable security +Account receivable)
( 427+300) and ( 322+259 $727.00 Current Liability $1,182.00 Liquid Ratio 0.6 Liquid Asset/Current Liability Computation of Cash Ratio Detail 2015 Cash & Marketable Security $427.00 Current Liability $1,182.00 Cash Ratio 0.4 cash & Equivalen to cash Asset/Current Liability Computation of Inventory Turnver Detail 2015 Sales $2,376.00 Average inventiry ( 815+797/2 $1,213.50 Inventory Turnover Ratio 2.0 Sales/Average Inventory No. of days sales in turnover ratio Detail 2015 Number of days in year                              365 Invetory Turnover Ratio                                  2 No. of days sales in turnover ratio 182.5 Sales/Average Inventory Days Average Payment period Detail Current Year Total Annual Purchase $753.00 No. of days in a year                              365 Average Payment period ( Total Annual Purcahse/365)                            2.06 Sales to Working Capital Detail Current Year Total Sales $2,376.00 Working Capital ( Current Asset-Current Liability) $360.00 (1542-1182) Sales to Working capital Ratio( Sales/ working Capital 6.6 Total Asset turnover ratio Detail Current Year Total Sales $2,376.00 Gross Profit Margin Average Asset(4935+4428)/2 $7,149.00 Detail Current Year Gross Profit $1,623.00 Total Asset turnover ratio ( Sales/Total Asset                            0.33 Total sales $2,376.00 Gross Profit ratio 68% Debt Equity Ratio Detail Current Year Return on Asset Total Debt $3,116.00 Detail Current Year Total Equity $1,819.00 (Netincome + Interest)= EBT
664+137) $801.00 Average Asset $7,149.00 Debt Equity Ratio( Debt/Equity)                            1.71 (4935+4428)/2 Return on Asset ( EBT/ Average Asset)                  0.11 Profit Margin ratio Detail Current Year Return on Equity Net Profit $664.00 Detail Current Year Total Sales $2,376.00 Earning available for equity Share $566.00 Total Equity $1,789.00 Net Profir / Sales                            0.28 EAE/Total Equity                  0.32 Dividend payout Detail Current Year Earning [per share $2.26 DPS $0.77 Dividend payout ratio                  0.34

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