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Author Question: Scenario: Pettijohn Inc.The balance sheet and income statement shown below are for Pettijohn Inc. ... (Read 104 times)

kmcolvin

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on: Aug 7, 2023

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Scenario: Pettijohn Inc.

The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.       

​

Balance Sheet (Millions of $)

2020

Assets

​

Cash and securities

$2,305.0

Accounts receivable

8,950.0

Inventories

16,200.0

Total current assets

27,455.0

Net plant and equipment

21,545.0

Total assets

$49,000.0

Liabilities and Equity

Accounts payable

$8,100.0

Notes payable

6,700.0

Accruals

5,300.0

Total current liabilities

20,100.0

Long-term bonds

10,900.0

Total debt

31,000.0

Common shares

7,370.0

Retained earnings

10,630.0

Total common equity

18,000.0

Total liabilities and equity

$49,000.0

Income Statement (Millions of $)

2020

Net sales

$69,500.0

Operating costs except depr’n

62,850.0

Depreciation

1,250.0

Earnings before interest and taxes (EBIT)

5,400.0

Less interest

1,232.0

Earnings before taxes (EBT)

4,168.0

Taxes

1375.4

Net income

$2,792.6

Other data:

Shares outstanding (millions)

200

Common dividends

$730

Interest rate on notes payable & L-T bonds

7%

Federal plus provincial income tax rate

33%

Year-end stock price

$88.50



Refer to Scenario: Pettijohn Inc. What is the firm’s days sales outstanding? Assume a 360-day year for this calculation.

◦

46.36


◦

47.28


◦

48.05


◦

49.00

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by kmcolvin on Aug 7, 2023

Hamad

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Reply #1 on: Aug 7, 2023
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kmcolvin

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Reply 2 on: Aug 7, 2023
Wow, this really help

cici

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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