The 2021 and 2020 balance sheets for Sunset Industries are provided below. The company’s sales for 2021 were $1,320 million, and EBITDA was 15% of sales. Furthermore, depreciation amounted to 10% of net fixed assets, interest expense was $30 million, the corporate tax rate was 25%, and Sunset pays out 40% of its net income as dividends. Sunset had 25 million shares outstanding in 2021, the 12/31/21 stock price was $80 per share, and its after-tax cost of capital was 15%. Based upon this information, answer the following questions. Sunset Industries December 31 Balance Sheets (in thousands of dollars)
Cash and cash equivalents $55,908 $44,000
Excess cash $5,992 $6,793
Accounts receivable $112,044 $92,370
Inventories $176,251 $157,488
Total current assets $350,195 $300,651
Net fixed assets $408,000 $324,000
Total assets $758,195 $624,651
Liabilities and equity
Accounts payable $42,018 $30,420
Accruals $24,187 $18,981
Notes payable $38,500 $40,000
Total current liabilities $104,705 $89,401
Long-term debt 125,000 $110,000
Total liabilities $229,705 $199,401
Common stock $336,000 $290,000
Retained Earnings $192,490 $135,250
Total common equity $528,490 $425,250
Total liabilities and equity $758,195 $624,651
Question # 1 What was the company’s 2021 net income?
Question #2 How much cash was provided by operating activities in 2021?
Question #3 Set up the company’s 2021 Statement of Stockholders’ Equity.
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