Problem - Presented here are summarized data from the balance sheets and income statements of Wiper, Inc.:
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WIPER, INC. Condensed Balance Sheets December 31, 2017, 2016, 2015 (in millions)
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2017
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2016
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2015
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Current assets
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$685
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$917
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$773
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Other assets
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2,417
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1,924
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1,723
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Total assets
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$3,102
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$2,841
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$2,496
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Current liabilities
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$581
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$816
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$714
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Long-term liabilities
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1,510
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995
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860
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Stockholders' equity
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1,011
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1,030
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922
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Total liabilities and stockholders' equity
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$3,102
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$2,841
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$2,496
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WIPER, Inc Selected Income statement and Other data For the year Ended December 31, 2017 and 2016 (in millions)
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2017
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2016
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Income statement data:
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Sales
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$3,054
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$2,917
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Operating income
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300
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314
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Interest expense
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88
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69
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Net income
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203
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198
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Other Data:
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Average number of common shares outstanding
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41.7
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47.1
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Total dividends paid
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$54.0
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$52.7
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Required:
a. Calculate return on investment, based on net income and average total assets, for 2017 and 2016.
b. Calculate return on equity for 2017 and 2016.
c. Calculate working capital and the current ratio for each of the past three years.
d. Calculate earnings per share for 2017 and 2016.
e. If Wiper's stock had a price/earnings ratio of 11 at the end of 2017, what was the market price of the stock?
f. Calculate the cash dividend per share for 2017 and the dividend yield based on the market price calculated in part e.
g. Calculate the dividend payout ratio for 2017.
h. Assume that accounts receivable at December 31, 2017, totaled $313 million. Calculate the number of days' sales in receivables at that date.
i. Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2017 and 2016.
j. Calculate the times interest earned ratio for 2017 and 2016.