Question
Assume that all of MNQ Company's sales are credit sales.
MNQ Company Income statement ($000 - Except for per share information) 2008 2007 2006 2005 2004 Sales $1,200 $1,100 $880 $750 $875 Cost of goods sold $540 $550 $264 $360 $306 Selling, general, and administrative expenses $180 $200 $165 $210 $180 Depreciation $200 $20 $100 $5 $75 Operating income $280 $330 $351 $175 $314 Other income $40 $30 $20 $18 $30 Earnings before interest and taxes (EBIT) $320 $360 $371 $193 $344 Interest expense $28 $27 $26 $25 $24 Earnings before taxes (EBT) $292 $333 $345 $169 $320 Taxes (35%) $102 $117 $121 $59 $112 Net income $190 $217 $224 $110 $208 Addition to retained earnings $45 $55 $200 $85 $120 Dividends $145 $162 $24 $25 $88 Additional Information: Shares outstanding 50 50 50 50 50 Book value per share 27 25.5 24.2 19.6 17.7 Market price per share 21 18.5 18 16 25 Earnings per share $3.80 $4.33 $4.49 $2.19 $4.15 Dividends per share $2.90 $3.23 $0.49 $0.49 $1.75 MNQ Company Balance Sheet ($000) 2008 2007 2006 2005 2004 Assets Current Assets Cash and cash equivalents $250 $225 $191 $160 $192 Accounts receivable $650 $585 $497 $425 $510 Inventories $300 $270 $230 $200 $240 Total Current Assets $1,200 $1,080 $918 $785 $942 Fixed Assets Property, plant, and equipment $2,200 $1,870 $1,814 $1,422 $1,400 Less: Accumulated depreciation $400 $200 $180 $80 $75 Net property, plant, and equipment $1,800 $1,670 $1,634 $1,342 $1,325 Intangible assets $300 $240 $220 $210 $205 Total Fixed Assets $2,100 $1,910 $1,854 $1,552 $1,530 Total Assets $3,300 $2,990 $2,772 $2,337 $2,472 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $400 $340 $299 $245 $319 Notes payable $300 $255 $224 $184 $239 Accrued expenses $600 $510 $449 $368 $478 Total Current Liabilities $1,300 $1,105 $972 $797 $1,037 Long-Term Liabilities Long-term debt $400 $380 $370 $350 $345 Deferred taxes $250 $230 $220 $210 $205 Total Long-Term Liabilities $650 $610 $590 $560 $550 Total Liabilities $1,950 $1,715 $1,562 $1,357 $1,587 Stockholders' Equity Common stock $100 $100 $100 $100 $100 Capital surplus $450 $420 $410 $380 $370 Retained earnings $800 $755 $700 $500 $415 Total Stockholders' Equity $1,350 $1,275 $1,210 $980 $885 Total Liabilities and Stockholders' Equity $3,300 $2,990 $2,772 $2,337 $2,472
Explanation / Answer
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