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Finance
The gross amount for property and equipment is $777,739.
The net amount for property and equipment is $484,641.
The gross amount for assets acquired under capital leases is $3,612.
The net amount for assets acquired under capital leases is $1,600
The amount for capital leases is not material. It represents less than 1% of total debt obligations.
The Westinghouse bonds are worth $1,520,674, and the capital lease obligation is only $400, so the capital lease obligation is not material for the total debt.
The total minimum future lease payment is $359,382 as at 2010.
The principal, using the 2/3 rule, would be $239,587.
The operating leases are very much material compared to the capital leases. The capital leases are less than 1% of the total leases.
Problem 8-5. a. net sales increased by 22.9% from 2010 to 2011. The dollar value increase was $294,184.
b. net earnings showed very little increase (0.79%), or a dollar value increase of $1,094.
c.
2011
2010
Net margin
8.58%
10.42%
ROA
9.61%
11.60%
Total Asset turn
1.11
1.10
Operating Margin
16.37%
20.63%
ROOA
9.79%
11.83%
Operating Asset Turn
1.13
1.12
DuPont
16.82%
18.71%
DuPont (op assets)
16.82%
18.73%
ROI
13.56%
14.69%
ROE
17.06%
19.03%
The profitability of this company is declining. The margins are not as good, which is the main sign. While revenues increased in 2011, the net earnings increased very little, indicating that while the company continues to enjoy top line success, that is not translating to the bottom line.
Case 8-5.
2009
2010
Net margin
9.26%
19.47%
Total Asset turn
0.43
0.42
ROA
4.00%
8.25%
Operating Margin
5.99%
12.21%
ROOA
10.05%
20.53%
Sales/Fixed Assets
4.53
3.83
ROE
4.84%
9.78%
Gross Margin
55.55%
58.46%
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