Chapter 6 Assignment_Deang, Lyka Mae P.

Chapter 6

Problem 1 (Day Sales Outstanding) Problem 5 (DuPont and ROE)

Formula:
DSO = 40 days Net Income Sales Ave. total assets
S= ₱7,300,000.00 ROE = Return on assets x Equity X Average total X Average stockholders
AR = ? multiplier Assets equity

Formula:
Accounts Receivable Return on assets Net Profit
Net Credit Sales x No. of days Total Assets

= 800,000.00 2,000,000.00
7,300,000.00 x 365 days 50,000,000.00

= 40 ROA 0.04

ROE 2,000,000.00
0.08
Problem 2 (Debt Ratio)
ROE 25000000
A/E = 2.4
D/A = ?

Formula: Problem 6 (DuPont and Net Income)

Total Liabilities
Total Assets Sales = ₱6,000,000.00
3.2 x = Sales/TA
3.2 x = 6,000,000/Assets
Assets = 6,000,000/3.2 x
Assets = ₱1,875,000.00

0.12 = Net Income/ 6,000,000 x 3.2 x 1,875,000/ 937,500

0.12 = 6.4 Net Income / 6,000,000
6.4 NI = (60,000) (0.12)
D NI = 720,000/6.4
A = 58.33% NI = ₱112,500.00

Problem 3 (Market/Book Ratio)

Problem 7 (Basic Earning power)
Formula:
Market value per share ROA = 8%
Book value per share NI = ₱600,000.00
TA = ?
= 32
7.5 ROA = NI/TA
8% = 600,000 / TA
= 4.27 TA = 600,000 / 8%
TA = ₱7,500,000.00

Problem 4 (Price/Earnings Ratio) EBIT ₱1,148,077.00 (225,000 + 923,077)

Interest 225,000.00 Given
EPS = ₱2.00 EBT ₱923,077.00 (600,000/0.65)
BVPS = ₱20.00 Taxes (35%) 323,077
M/B = 1.2x NI ₱600,000.00
P/E = ?
BEP = EBIT/TA
M/B = 1.2x = 1,148,077 / 7,500,000
P/20 = 1.2x -0.1531
P= (20) (1.2x) BEP = 15.31%
P= ₱24.00

P/E = ₱24.00 /2= 12.0x

Problem 8 (Ratio Calculations)

ROE = 3% and Sales/ Total assets = 1.5%

ROE = Profit margin x Total assets turnover
3% = Profit margin (1.5)
Profit margin = 3% / 1.5
Profit margin = 2%

9/26/2022 21:28:08 1