Posted: November 22nd, 2022

Gerrard Construction Co. is an excavation contractor.

Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2007, financial statements:FOR THE YEAR ENDED DECEMBER 31, 2007:Net Revenue....................... ...$16,100 Cost of Services Provided..........5,700Depreciation expense...............3,250Operating Income....................$7,150Interest Expense......................1,900Income Tax expense.................1,600Net Income..............................$3,650AT DECEMBER 31, 2007ASSETSCash and short-term investments..................$1,400Accounts receivable, net...............................4,900Property, plant, and equipment, net...............38,700Total Assets................................................$45,000LIABILITIES AND OWNERS EQUITYAccounts payable..........................................$750Income taxes payable.....................................800Notes payable (long term)...............................23,750Paid-in capital................................................5,000Retained earnings..........................................14,700Total liabilities and owners equity....................$45,000At December 31,2006 total assets were $41,000 and total owners equity was $16,300. There were no changes in notes payable or paid-in capital during 2007.1Gerrard Construction Company wishes to lease some new earth moving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of $2 million have on the company's debt ratio and debt/equity ratio?2Calculate the amount of dividends declared and paid during the year ended December 31, 2007 (Hint: Do a T-account analysis of retained earnings.)3Review the answer to question number 2. At this time assume that Gerrard Construction Co. had 1,200,000 shares of $1 par value common stock outstanding throughout 2007, and that the market price per share of common stock at December 31, 2007 was $18.75. Calculate the following profitability measures for the year ended December 31, 2007.1. Earnings per share of common stock2. Price/earnings ratio3. Dividend yield4. Dividend payout ratio

Tags: Ace My Homework: Essay Help, Assignment Help: USA's #1 Online Assignment Writing Service, Do My Assignment for Me Online - Write Academic Papers, Reliable Online Homework Help For You