Use the Balance Sheet and Income Statement of ABC Corporatio…
Use the Balance Sheet and Income Statement of ABC Corporation to answer questions 26 – 42. ABC Corporation Balance Sheets ($ Millions) Year 2 Year 1 Assets Cash and equivalents 100 85 Accounts receivable 275 300 Inventories 375 250 Total current assets 750 635 Net plant and equipment 2,300 1,490 Total assets 3,050 2,125 Liabilities and Equity Accounts payable 150 85 Accruals 75 50 Notes payable 150 75 Total current liabilities 375 210 Long-term debt 450 290 Total liabilities 825 500 Common stock 1,225 1,225 Retained earnings 1,000 400 Common equity 2,225 1,625 Total liabilities and equity 3,050 2,125 Additional Information Excess Cash 0 0 Cost of goods sold is 75% of sales Income Statements ($ Millions) Year 2 Year 1 Sales 2,285 1,585 Operating costs excluding depreciation 1,250 1,000 Depreciation and amortization 100 75 Earnings Before Interest and Taxes 935 510 Interest 63 46 Earnings Before Taxes 872 464 Taxes (25%) 218 116 Net income 654 348 Dividends paid 54 48 Addition to retained earnings 600 300 Additional Information Number of Shares outstanding (in Millions) 100 100 Stock Price per Share ($) 27.78 25.28 The current ratio in year 2 is equal to