FINANCIAL STATEMENTS The Davidson Corporation’s balance sheet and income statement are provided here.
Davidson Corporation: Balance Sheet as of December 31, 2008 (Millions of Dollars) |
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Assets |
Liabilities and Equity |
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Cash and equivalents |
$ 15 |
Accounts payable |
$ 120 |
Accounts receivable |
515 |
Notes payable |
220 |
Inventories |
880 |
Accruals |
280 |
Total current assets |
$1,410 |
Total current liabilities |
$ 620 |
Net plant and equipment |
2,590 |
Long term bonds |
1,520 |
Total debt |
$ 2,140 |
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Common stock (100 million shares) |
260 |
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Retained earnings |
1,600 |
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Common equity |
$ 1,860 |
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Total assets |
$4,000 |
Total liabilities and equity |
$ 4,000 |
Davidson Corporation: Income Statement for Year Ending December 31, 2008 (Millions of Dollars)
Sales |
$6,250 |
Operating costs excluding depreciation and amortization |
5,230 |
EBITDA |
$1,020 |
Depreciation & amortization |
220 |
EBIT |
$800 |
Interest |
180 |
EBT |
$620 |
Taxes (40%) |
248 |
Net income |
$372 |
Common dividends paid |
$146 |
Earnings per share |
$3.72 |
a. Construct the statement of stockholders’ equity for December 31, 2008.
b. How much money has been reinvested in the firm over the years?
c. At the present time, how large a check could be written without it bouncing?
d. How much money must be paid to current creditors within the next year?