Table gives abbreviated balance sheets and income statements for Este´e Lauder Companies.
TABLE
End of Year Start of Year
Balance Sheet
Assets
Current Assets:
Cash and Marketable Securities 402 254
Accounts Receivable 1039 861
Inventories 987 856
Other Current Assets 360 269
Total Current Assets 2787 2239
Fixed Assets:
Tangible fixed assets
Property, Plant & Equipment 2394 2113
Less accumulated depreciation 1351 1232
Net Tangible Fixed Assets 1043 881
Long-term investments 24 22
Other long-term assets 1157 984
Total Assets 5011 4126
Liabilities and Shareholder's Equity
Current Liabilities
Debt due for repayment 119 60
Accounts payable 1581 1440
Total Current Liabilities 1699 1501
Long-term debt 1078 1028
Other long-term liabilities 581 398
Total Liabilities 3358 2927
Total Shareholders' equity 1653 1199
Total Liabilities and shareholders' equity 5011 4126
Income Statement
Net Sales 7911
Cost of goods sold 1997
Selling, general and administrative expenses 4852
Depreciation 251
Earnings before interest and taxes (EBIT) 811
Interest expense 67
Taxable income 744
Tax 260
Minority interest 10
Net income 474
Dividends 107
Addition to retained earnings 367
Calculate the following ratios:
a. Return on assets.
b. Operating profit margin.
c. Sales-to-assets ratio.
d. Inventory turnover.
e. Debt-equity ratio.
f. Current ratio.
g. Quick ratio
Look again at Table. At the end of fiscal 2008 Este´e Lauder had 195 million shares outstanding19 with a share price of $45.50. The company's weighted-average cost of capital was about 10%.
Calculate:
a. Market value added.
b. Market-to-book ratio.
c. Economic value added.
d. Return on capital.