How large a check could be written without it bouncing

Reference no: EM13298028

The Davidson Corporation's balance sheet and income statement are given below:

Davidson Corporation: Balance Sheet as of December 31, 2008 (Millions of Dollars)

ASSETS LIABILITIES AND EQUITY
Cash and equivalents $15 Accounts payable $120
Accounts receivable 530 Notes payable 230
Inventories 860 Accruals 300
Total current assets $1,405 Total current liabilities $650
Net plant and equipment 2,365 Long-term bonds 1,480
Total debt $2,130
Common stock (100 million shares) 240
Retained earnings 1,400
Common equity $1,640
Total assets $3,770 Total liabilities and equity $3,770

Davidson Corporation: Income Statement for Year Ending December 31, 2008 (Millions of Dollars)

Sales $7,500
Operating costs excluding depreciation and amortization 5,850
EBITDA $1,650
Depreciation and amortization 525
EBIT $1,125
Less: Interest 213
EBT $912
Taxes (40%) 364.8
Net income $547.2
Common dividends paid $298.224
Earnings per share $5.472

a. Construct the Statement of Retained Earnings for December 31, 2008. Round your answer to two decimal places.

Balance of Retained Earnings, December 31, 2007 million
Add: Net income, 2008 million
Less: Dividends paid to common stockholders million
Balance of Retained Earnings, December 31, 2008 million

b. How much money has been reinvested in the firm over the years? Round your answer to the nearest hundredth of million, if necessary.

c. At the present time, how large a check could be written without it bouncing? Round your answer to the nearest hundredth of million, if necessary.

d. How much money must be paid to current creditors within the next year?

Reference no: EM13298028

Questions Cloud

How to calculate the concentration of h3o+ of the solution : A 0.010 M HCN solution is .020% ionized. Calculate the concentration of H3O+ of this solution. Please show work and solution.

Modify the algorithm to rectify the above problem : Modify the algorithm to rectify the above problem.

What is global income in 2010 : Suppose that they have no other income, interest expenses are unchanged, and taxes are the same percentage of pretax income as in 2009.

Define flow at a hydraulic jump in terms of flow : Define flow at a hydraulic jump (upstream and downstream) in terms of the types of flow and corresponding Froude number. What is the depth of water at each section (upstream and downstream) compared to critical depth

How large a check could be written without it bouncing : At the present time, how large a check could be written without it bouncing? Round your answer to the nearest hundredth of million, if necessary.

Explain single carbon-carbon bonds represent potential : The polyyne molecules CkH2 with alternating triple and single carbon-carbon bonds represent potential nanowires for molecular electronics. They can be modelled as linear 1D-boxes with 2k

Clostridium and streptococcus are both catalase-negative : Clostridium and streptococcus are both catalase-negative. Streptococcus grow by fermentatin. Why is clostridium killed by oxygen, whereas Streptococcus is not?

What is the magnitude of the angular acceleration of ball : You are participating in league bowling with your friends. Time after time, you notice that your bowling ball rolls to you without slipping on the flat section of track. What is the magnitude of the angular acceleration of the ball

Theft of logins and passwords : Theft of logins and passwords

User Account

All Pages