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P&B Manufacturing Comparative Balance Sheet (dollars in millions) Current assets: Cash and cash equivalents Accounts Receivable Inventory Total current assets Property, plant and equipment Less accumulated depreciation Net property, plant and equipment Total assets Assets Ending Balance Beginning Balance Sales P&B Manufacturing Income Statement For Year Ended December 31 (dollars in millions) 65 91 Cost of goods sold 530 572 Gross Margin 600 580 Selling and administrative expenses 1,195 1,243 Net operating income 1,719 1,656 Nonoperating items: Gain on sale of equipment 640 450 income before taxes 1,079 1,176 Income taxes 2,274 2,419 Net Income Liabilities and Stockholders' Equity Current liabilities: Accounts payable 180 180 Accrued liabilities 94 105 Income taxes payable 72 88 Total current liabilities 346 373 Bonds payable Total liabilities 180 310 526 683 Stockholders' equity: Common stock 800 800 Retained eamings 948 Total stockholders' equity 1,748 1,736 Total liabilities and stockholders' equity 2,274 2,419 4,450 3,550 900 820 80 84 29 55 936 P&B Manufacturing also provided the following information: 1 The company sold equipment that had an original cost of $15 million and accumulated depreciation of $9 million. The cash proceeds from the sale were $11 million. The gain on the sale was $4 million. 2 The company did not issue any new bonds during the year 3 The company paid a cash dividend during the year 4 The company did not complete any common stock transactions during the year Required: 1. Using the indirect method, prepare a Statement of Cash Flows for the year 2. To help P & B Manufacturing assess its liquidity at the end of the year calculate the following: a. Current ratio b. Acid-test (quick) ratio 3. To help P & B Manufacturing assess its asset management calculate the following: a. Average collection period (assuming all sales are on account) b. Average sale period 4. To help P & B Manufacturing assess its debt management calculate the following: a. Debt-to-equity ratio at the end of the year b. Equity multiplier 5. To help P & B Manufacturing assess its profitability calculate the following a. Net profit margin percentage b. Return on equity 6. To help P & B Manufacturing assess its market performance, calculate the following (assume the par value of the company's common stock is $10 per share) a. Earnings per share b. Dividend payout ratio P&B Manufacturing Comparative Balance Sheet (dollars in millions) Dark gray boxes have drop down menu's to choose from P&B Manufacturing Statement of Cash Flows (indirect method) For the Year Ended December 31 Operating Activities: Net income: Adjustments to convert net income to cash basis: Current assets: Cash and cash equivalents Accounts Receivable Inventory Total current assets Property, plant and equipment Less accumulated depreciation Net property, plant and equipment Total assets Current liabilities: Accounts payable Accrued liabilities Subtotal of Adjustments Net cash provided by operating activities Investing Activities Income taxes payable Total current liabilities bonds payable Total liabilities Stockholders' equity Common stock Net cash used in investing activities Financing Activities Net cash used in financing activities Beginning cash and cash equivalents Ending cash and cash equivalents Assets Ending Balance Beginning Balance 65 91 530 572 600 580 1,195 1,243 1,719 1656 640 480 1,079 1,176 2.274 2.419 Labilities and Stockholders' Equity 180 180 54 105 22 346 373 180 310 526 683 800 800 948 936 1,748 1,736 2,274 2,419 Retained eamings Total stockholders' equity Total liabilities and stockholders' equity P&B Manufacturing Income Statement For Year Ended December 31 (dollars in millions) Sales 4,450 Cost of goods sold 3,550 Gross Margin 900 Selling and administrative expenses 30 Net operating income HO Nonoperating items: Gain on sale of equipment, 4 Income before taxes 04 income taxes 29 Net income 55. To assess the liquidity at the end of the year calculate Current Ratio and Acid-test (quick). Round your answers to 2 decimal places-for example 5.67 Requirement #20 Calculate the Current Ratio But your final answer in this box Requirement #2b Calculate the Acid-text (quick) ratio But your final answer in this box To assess asset management calculate Average collection period and Average sale period. Round your answers to 2 decimal places-for example 5.67 Requirement #3a Calculate Average collection period- assume all sales are on account But your final answer in this box Requirement #3b Calculate Average sale period-use 365 days in a year. Round intermediate calculations and final answers to 2 decimal places But your final answer in this box To assess debt management calculate Debt-to-Equity ratio at the end of the year and Equity Multiplier. Round your calculations & answers to 2 decimal places-for example 15.67/16.78-.93 Requirement #4a Calculate Debt-to-Equity ratio But your final answer in this box Requirement #4b Calculate Equity multiplier But your final answer in this box To assess profitability calculate Net Profit Margin Percentage and Return on Equity. Round your calculations & answers to 2 decimal places-for example 5.67/6.78-83 Requirement #50 Calculate Net profit margin percentag. Both 50 and 5b are to be expressed as a percent. Research if you are unsure how to express a number as a percent. But your final answer in this box Requirement #5b Calculate Return on equity percentage But your final answer in this box To assess market performance, calculate Earnings Per Share and Dividend Payout Ratio. Assume the par value of the company's common stock is $10 per shareRound your calculations & answers to 2 decimal places-for example 5.67/6.78.83 Requirement #6a Calculate Earnings per share. Express in dollars and cents But your final answer in this box Requirement #6b Calculate Dividend payout ratio-express in a percent. Assume the par value of the company's common stock is $10 per share But your final answer in this box

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