FINANCIAL RATIOS ;

QUESTION :

 

2.  Rate of Return

1. Auckland Woolens Company reported a 6% operating margin on sales, a 12% pretax operating return on total assets, and $400 million of average total assets.  Compute the (a) operating income (b) total sales, and (c) pretax operating return on total assets.
2. Suzuki Electronics Corporations reported ¥200 millions of sales.  ¥20 million of operation income, and a total asset turnover of five times (¥ is Japanese yen).  Compute the (a) total assets, (b) operating return on sales , and (c) pretax operating return on total assets. 

1. Abercrombie  & Fitch has more than 1,125 stores in the United States , Canada, and the U.K.  The company was established in 1892 and is well known as a supplier of rugged, high- quality outdoor gear.  Excerpts from the company’s annual report for the fiscal year ended January 31, 2009 , are in Exhibit 17.9.Abercrombie & Fitch paid cash dividends $.070 per common share in fiscal 2009, and an average of 86,816 million shares were outstanding during the year.  Assume that Abercrombie & Fitch has no stock options or convertible securities.  The company’s market price on January 31, 2009, was $17.85 per share.  Compute the following financial ratios for fiscal 2009:

1. Current ration
2. Total debt to equity

3. Gross profit

   rate

4. Return on Sales
5. Return on stockholders’ equity
6. Earnings per share
7. Price earnings
8. Dividend yield
9. Dividend payout

 

  

  

Gross profit

  

  

  

  

  

    

 

   

 

 

 

 

 

 

  

 

 

 

 

$2,848 $2,568  

        

Income statement for the year ended January 31, 2009
Net Sales	$3,540
Cost of sales	1,178
$2,362
Other expenses (summarized)	1,911
Earnings before income taxes	$451
Provision for income taxes	179
Net earnings	$272
Balance Sheet	January 31,2009	February 2, 2008
Assets
Inventories	$372	$333
Other current assets (summarized)	713	807
Total current assets	$1,085	$1,140
Property and equipment (net)	1,399	1,318
Other assets	364	110
Total Assets		$2,848		$2,568
Liabilities and Stockholders’ equity
Current liabilities (summarized)	$450	$543
Long-term liabilities (summarized)	553	406
Total liabilities	$1,003	$949
Stockholders’ equity (summarized)	1,845	1,619
Total liabilities and stockholders’ equity