Problem 11-13 Ratio analysis-comprehensive problenm Presented here are summarized data
from the balance sheets and income statement WIPER, INC. Condensed Balance Sheets
December 31, 2014, 2013, 2012 in milions) 2014 2013 2012 Current assets Other assets 677 $
891 736 2,413 1,920 1,719 3,090 $2,811 $2,455 803 $ 710 827 918 $ 562 Current liabilities
Long-term liabilities Owners equity 982 1,521 1,0071,026 $3,090$2,811$2,455 3.090 $2.811
$2,455 WIPER, INC Selected Income Statement and Other Data For the year Ended December
31, 2014 and 2013 (in millions) 2014 . : 2013 Income statement data Sales Operating income
(EBIT) Interest expense Net income $3,050$2,913 310 65 187 296 84 192 Other data Average
number of common shares outstanding Total dividends paid 41.3 46.7 s 50.0S52.3 Required a.
Calculate returm on investment. based on net income e and average totaf assets, for 2014 and 2
Solution
Return on Investment = Net Income x 100 / Average Assets.
Average Assets = Assets at beginning + Assets at end
For 2014:
192 x 100 / 2,950.5 = 6.5%
For 2015:
187 x 100 / 2,633 = 7.1%
Days’ Sales in Receivables = Average receivables / Sales / 365
309 / 3060 / 365 = 309 / 8.38
= 37 days.
Debt Ratio = Total debt / Capital Employed
2014 = 2083 / 2528 = 82.4%
2013 = 1785 / 2008 = 88.9%
Debt Equity Ratio = Long-term debt / Owners’ equity
2014 = 1521 / 1007 = 151%
2013 =982 / 1026 = 96%
Times Interest Earned Ratio = EBIT / Total Interest Payable
2014 =296 / 84 = 3.5 times
2013 =310 / 65 = 4.8 times..
Problem 11-13 Ratio analysis-comprehensive problenm Presented her.pdf
1. Problem 11-13 Ratio analysis-comprehensive problenm Presented here are summarized data
from the balance sheets and income statement WIPER, INC. Condensed Balance Sheets
December 31, 2014, 2013, 2012 in milions) 2014 2013 2012 Current assets Other assets 677 $
891 736 2,413 1,920 1,719 3,090 $2,811 $2,455 803 $ 710 827 918 $ 562 Current liabilities
Long-term liabilities Owners equity 982 1,521 1,0071,026 $3,090$2,811$2,455 3.090 $2.811
$2,455 WIPER, INC Selected Income Statement and Other Data For the year Ended December
31, 2014 and 2013 (in millions) 2014 . : 2013 Income statement data Sales Operating income
(EBIT) Interest expense Net income $3,050$2,913 310 65 187 296 84 192 Other data Average
number of common shares outstanding Total dividends paid 41.3 46.7 s 50.0S52.3 Required a.
Calculate returm on investment. based on net income e and average totaf assets, for 2014 and 2
Solution
Return on Investment = Net Income x 100 / Average Assets.
Average Assets = Assets at beginning + Assets at end
For 2014:
192 x 100 / 2,950.5 = 6.5%
For 2015:
187 x 100 / 2,633 = 7.1%
Days’ Sales in Receivables = Average receivables / Sales / 365
309 / 3060 / 365 = 309 / 8.38
= 37 days.
Debt Ratio = Total debt / Capital Employed
2014 = 2083 / 2528 = 82.4%
2013 = 1785 / 2008 = 88.9%
Debt Equity Ratio = Long-term debt / Owners’ equity
2014 = 1521 / 1007 = 151%
2013 =982 / 1026 = 96%
Times Interest Earned Ratio = EBIT / Total Interest Payable
2014 =296 / 84 = 3.5 times
2013 =310 / 65 = 4.8 times.
