Pettijohn Inc $\text { Balance Shet (Millions of } \$ \text { ) }$

question 83

Multiple Choice

pettijohn Inc.
The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm hasno amortization charges, it does not lease any ass ets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

$\text { Balance Shet (Millions of } \$ \text { ) }$
$\begin{array}{lr}\text { Assets } & \underline{2016} \\\text { Cash and securities } & \$ 1,554.00 \\\text { Accounts receivable } & 9,660.00 \\\text { inventories } & 13,440.00 \\\text { Total current assets } & \$ 24,654.00 \\\text { Net plant and equipment } & 17,346.00 \\\text { Total assets } & \$ 42,000.00 \\\text { Liabilities and Equity } \\\text { Accounts payable } & \$ 7,980.00 \\\text { Notes payable } & 5,880.0 0\\\text { Accruals } & 4,620.00\\\text { Total current liabilities } & \$ 18,480.00 \\\text { Cong-term bonds } & 10,920.00 \\\text { Cotal liabilities } & \$ 29,400.0 0\\\text { Common stock } & 3,360.00 \\\text { Retained earnings } & 9,240.00 \\\text { Total common equity } & \$ 12,600.00 \\\text { Total liabilities and equity } & \$ 42,000.00\\\\\text { Income Statement (Millions of \$) } & 2016 \\\text { Net sales } & \$ 58,800.00 \\\text { Operating costs except depr'n } & \$ 55,274.00 \\\text { Depreciation } & \$ 1,029.00\\\text { Earnings bef int and taxes (EBIT) } & \$ 2,497.00 \\\text { Less interest } & 1,050.00 \\\text { Earnings before taxes (EBT) } & \$ 1,447.00 \\\text { Taxes } & \$ 314.00 \\\text { Net income } & \$ 1,133.00\\\text { Dther data: }\\\text { Shares outstanding (millions) } & 175.00 \\\text { Common dividends } & 509.83 \\\text { Int rate on notes payable \& L-T bonds } & 6.25 \% \\\text { Federal plus state income tax rate } & 21.7 \% \\\text { Year-end stock price } & \$ 77.69\end{array}$
-Refer to the data for Pettijohn Inc.What is the firm's current ratio?

• A) 0.97
• B) 1.08
• C) 1.20
• D) 1.33
• E) 1.47

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