The financial statements of Miller Instruments, Inc. are given below. Miller Instruments, Inc.
Income Statement (2020)
Sales $8,000,000
Cost of goods sold 5,260,000
Gross profit 2,740,000
Selling and administrative expenses 1,350,000
Depreciation 150,000
EBIT 1,240,000
Interest expenses 140,000
Income before tax 1,100,000
Tax expense 440,000
Net income $660,000
Balance Sheet 2020 2019
Cash $200,000 $50,000
Accounts receivable 1,200,000 950,000
Inventory 1,840,000 1,500,000
Total current assets 3,240,000 2,500,000
Fixed assets 3,200,000 3,000,000
Total assets $6,440,000 $5,500,000
Accounts payable 800,000 720,000
Bank loan 600,000 100,000
Total current liabilities 1,400,000 820,000
Bonds payable 900,000 1,000,000
Total liabilities 2,300,000 1,820,000
Common stock
(130,000 shares) 300,000 300,000
Retained earnings 3,840,000 3,380,000
Total liabilities & equity $6,440,000 $5,500,000
Note: The common shares are trading in the stock market for $40 each.
1. The firm's P/E ratio for 2020 is___.
2. The firm's price to book value ratio for 2020 is.
3. The firm's price to sales ratio for 2020 is.
4. The firm's Enterprise value (EV)/EBITDA ratio for 2020 is.
5. Calculate the firm's return on equity (ROE) using the DuPont identity.