Question Details

(Solution Download) Exercise 2-7 The following information is available for Callaway Golf Company for the years 2008 and


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise 2-7

 

The following information is available for Callaway Golf

 

Company for the years 2008 and 2007. (Dollars are in

 

thousands, except share information.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20082007
Net sales$ 1,117,204$ 1,124,591
Net income (loss)66,17654,587
Total assets855,338838,078
Share information
Shares outstanding at year-end64,507,00066,282,000
Preferred dividends00

 


 


 

There were 73,139,000 shares outstanding at the end of 2006.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collapse question part

 

(a)

 

What was the companyA????1s earnings per share for each year?

 

(Round answers to 2 decimal places, e.g.

 

15.25.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2008:$
2007:

 

$

 

 

 

 

 

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Problem 2-5A

 

Here and following are financial statements of Batcha

 

Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BATCHA COMPANY

 

Income Statement

 

For the Year Ended December 31, 2012

Net sales$2,234,059
Cost of goods sold1,028,326
Selling and administrative expenses921,737
Interest expense90,218
Income tax expense70,003
Net income$ 123,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BATCHA COMPANY

 

Balance Sheet

 

December 31, 2012

Assets
Current assets
  Cash$ 75,659
  Short-term investments85,003
  Accounts receivable (net)180,767
  Inventory163,269
   Total current assets504,698
Plant assets (net)591,226
Total assets$ 1,095,924
Liabilities and StockholdersA????1 Equity
Current liabilities
  Accounts payable$ 175,559
  Income taxes payable36,503
   Total current liabilities212,062
Bonds payable210,967
   Total liabilities423,029
StockholdersA????1 equity
  Common stock365,926
  Retained earnings306,969
   Total stockholdersA????1 equity672,895
Total liabilities and stockholdersA????1 equity$1,095,924

 


 


 

Additional information: The cash provided by operating activities

 

for 2012 was $206,359. The cash used for capital expenditures was

 

$107,926. The cash used for dividends was $32,003. The average

 

number of shares outstanding during the year was 50,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collapse question part

 

(a)

 

Compute the following values and ratios for 2012. (We provide the

 

results from 2011 for comparative purposes.) (If answer

 

is negative enter it with a negative sign preceding the number e.g.

 

-15,000 or in parenthesis e.g. (15,000).)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)Working capital. (2011: $160,500)
(ii)Current ratio. (2011: 1.65:1)
(iii)Free cash flow. (2011: $48,700)
(iv)Debt to total assets ratio. (2011: 31%)
(v)Earnings per share. (2011: $3.15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital

 

$

 

Current ratio (Round to 2 decimal places, e.g. 0.78

 

: 1.)

 

 

:1
Free cash flow

 

$

 

Debt to total assets ratio (Round to 1 decimal

 

place, e.g. 78.9%.)

 

 

%
Earnings per share (Round to 2 decimal places, e.g.

 

$2.78.)

 

$

 

 

 

 

 


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