Use the Table for the Question(s) Below -Refer to the Balance Sheet Above

question 13

Essay

Use the table for the question(s) below.
$\begin{array} { c } \text {Luther Corporation }\\ \text { Consolidated Balance Sheet }\\ \text { June 30, 2011 and 2012 (in \$ millions)}\\\hline\begin{array} { l } \text {Assets }&2012&2011&\begin{array} { l } \text {Liabilities and }\\ \text {Shareholders' Equity }\\\end{array}&2012&2011\\\hline\text { Current Assets } & &&{\text { Current Liabilities }} \\\hline \text { Cash } & 63.6 & 58.5 & \text { Accounts payable } & 87.6&73 .5\\\hline \text { Accounts receivable }&55.5&39.6&\begin{array} { l } \text {Notes payable / }\\ \text { short-term debt}\\\end{array}&10.5&9 .6\\\hline \text { Inventories }&45.9&42.9&\begin{array} { l } \text {Current maturities of }\\ \text { long-term debt}\\\end{array}&39.9&36.9\\\hline \text { Other current assets } & 6.0 & 3.0 & \text { Other current liabilities } & 6.01&2 .0 \\\hline \text { Total current assets } & 171.0 & 144.0 & \text { Total current liabilities } & 144.0&132 .0 \\\hline\\\hline\text { Long-Term Assets } &&& \text { Long-Term Liabilities }\\\hline \text { Land } & 66.6 & 62.1 & \text { Long-term debt } & 239.7&168 .9 \\\hline \text { Buildings } & 109.5 & 91.5 & \text { Capital lease obligations } & -----& ----- \\\hline \text { Equipment } & 119.1 & 99.6 & \text { Total Debt } & 239.7&168 .9 \\\hline\begin{array} { l } \text { Less accumulated}\\ \text { depreciation }\\\end{array}&(56.1) & (52.5) & \text { Deferred taxes } & 22.8&22 .2\\\hline\begin{array} { l } \text { Net property, plant, and}\\ \text { equipment}\\\end{array}&239.1 & 200.7 &\text { Other long-term liabilities }&---&---\\\hline \text { Goodwill } & 60.0 & -- & \text { Total long-term liabilities } & 262.5&191 .1 \\\hline \text { Other long-term assets } & 63.0 & 42.0 & \text { Total liabilities } & 406.5&323 .1 \\\hline \text { Total long-term assets } & 362.1 & 242.7 & \text { Shareholders' Equity } & 126.6&63 .6 \\\hline\\\hline\text { Total Assets }&533.1 & 386.7&\begin{array} { l } \text {Total liabilities and }\\ \text { Shareholders' Equity}\\\end{array}&533.1&386.7\\\end{array}\end{array}$

-Refer to the balance sheet above. If on 30 June 2011 Luther has 8 million shares outstanding trading at $15 per share, then what is Luther's market-to-book ratio?

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Definitions:

Cross Border Fund

An investment fund that has the capability to invest in financial assets across different countries.

Benchmark

A standard or point of reference against which things may be compared or assessed, particularly in the financial markets to measure the performance of stocks or funds.

Interest Rate Parity Theory

Interest Rate Parity Theory is an economic theory which suggests that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Exchange Rates

The rate at which one currency can be exchanged for another, influencing international trade and capital flow between countries.