Small Business Finance Ch. 3 Homework

If ABC Company earned $240,000 in net income and paid cash dividends of $50,000, what are ABC's earnings per share if it has 85,000 shares outstanding?

The earnings per share of ABC Company is $2.82 (EPS = Net income / number of shares) ($2.82 = 240,000/ 85,000)

The common-sized income statement provides insightful information in terms of profits per sales dollars. These are numbers that managers watch closely on a monthly basis, if not on a daily basis. A student is well advised to understand margins, whether she is in finance, marketing, or any business major. The common-sized balance sheet shows how the firm's assets have been allocated and how the assets have been financed in terms of debt versus equity. Are the above statements true or false?

True

Interpret the information in the popup window, regarding Westlake Corporation's cash flows.

Westlake Corporation generated a positive cash flow from operations ($587), but an even greater amount was used to invest in fixed assets ($1,065)