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Scenario: Pettijohn Inc -Refer to Scenario: Pettijohn Inc

question 96

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Scenario: Pettijohn Inc.The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.​​  Balance Sheet (Millions of $ )   Assets 2007 Cash and securities $1,554.0 Accounts receivable 9,660.0 Inventories 13,440.0 Total current assets $24,654.0 Net plant and equipment 17,346.0 Total assets $42,000.0 Liabilities and Equity  Accounts payable $7,980.0 Notes payable 5,880.0 Accruals 4,620.0 Total current liabilities $18,480.0 Long-term bonds 10,920.0 Total debt $29,400.0 Common stock 3,360.0 Retained earnings 9,240.0 Total common equity $12,600.0 Total liabilities and equity $42,000.0\begin{array}{l}\text { Balance Sheet (Millions of } \$ \text { ) }\\\begin{array}{lr}\text { Assets } & 2007 \\\text { Cash and securities } & \$ 1,554.0 \\\text { Accounts receivable } & 9,660.0 \\\text { Inventories } & 13,440.0 \\\text { Total current assets } & \$ 24,654.0 \\\text { Net plant and equipment } & 17,346.0 \\\text { Total assets } & \$ 42,000.0 \\\text { Liabilities and Equity } & \\\text { Accounts payable } & \$ 7,980.0 \\\text { Notes payable } & 5,880.0 \\\text { Accruals } & 4,620.0 \\\text { Total current liabilities } & \$ 18,480.0 \\\text { Long-term bonds } & 10,920.0 \\\text { Total debt } & \$ 29,400.0 \\\text { Common stock } & 3,360.0 \\\text { Retained earnings } & 9,240.0 \\\text { Total common equity } & \$ 12,600.0 \\\text { Total liabilities and equity } & \$ 42,000.0\end{array}\end{array}  Income Statement (Millions of $ )  2007 Net sales $58,800.00 Operating costs except depr’n $54,978.0 Depreciation $1,029.0 Earnings before interest and taxes (EBIT)  $2,793.0 Less interest 1,050.0 Earnings before taxes (EBT)  $1,743.0 Taxes $610.1 Net income $1,133.0 Other data:  Shares outstanding (millions)  175.00 Common dividends $509.83 Interest rate on notes payable & L-T bonds 6.25% Federal plus state income tax rate 35% Year-end stock price $77.69\begin{array}{lr}\text { Income Statement (Millions of } \$ \text { ) } & 2007 \\\text { Net sales } & \$ 58,800.00 \\\text { Operating costs except depr'n } & \$ 54,978.0 \\\text { Depreciation } & \$ 1,029.0 \\\text { Earnings before interest and taxes (EBIT) } & \$ 2,793.0 \\\text { Less interest } & 1,050.0 \\\text { Earnings before taxes (EBT) } & \$ 1,743.0 \\\text { Taxes } & \$ 610.1 \\\text { Net income } & \$ 1,133.0 \\\text { Other data: } & \\\text { Shares outstanding (millions) } & 175.00 \\\text { Common dividends } & \$ 509.83 \\\text { Interest rate on notes payable \& L-T bonds } & 6.25 \% \\\text { Federal plus state income tax rate } & 35 \% \\\text { Year-end stock price } & \$ 77.69\end{array}
-Refer to Scenario: Pettijohn Inc.What is the firm's days sales outstanding? Assume a 360-day year for this calculation.


Definitions:

Power of The Situation

The influence that environmental or situational factors have on individuals' behavior, often underestimating personal dispositional factors.

Extraverted People

Individuals characterized by their outgoing, energetic, and social nature, often feeling energized by social interaction.

Stable Identity

A consistent and enduring sense of self that persists over time and across different situations.

Evolutionary Perspective

a theoretical approach that explains human behavior and psychological traits as adaptations developed to increase ancestral survival and reproductive success.

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