years. | | The step-by-step calculation is: P | = | S(1 + rt)-1 | | | = | 400,000(1 + 0.0892 x 0.24657534...)-1 | | | = | 400,000 x 0.97847883... | | | = | $391,391.53 | Rounded as last step | b)You are correct. When the first bill matures at time 90 days, the investor purchases a second bill. We must find the purchase price of the second bill. This can be displayed on a time line: | | | | | $P | $400,000 | | | | | | 0 | 90 | 180 | 270 | | | | | | | | | P | = | price | = | unknown | | S | = | Maturity value | = | $400,000 | | r | = | Simple interest rate (decimal) | = | 9.16 | 100 | | = | 0.0916 | | t | = | Time period (years) | = | 90 | 365 | | = | 0.24657534... years.
Analysis-Beta Corporation 1. Sources of cash-Amount received from customers, Issuance of common stock(1991) Uses of cash-Amount paid to suppliers, Investments in capital(1991) 2. Difference between net income and cash-Difference between account receivables and payables ,high value of depreciation 3. Cash flow from operations- | 1991 | 1990 | 1989 | Cash flow from operations | 3919 | 7000 | 3670 | Capital expenditures | 6031 | 4600 | 3650 | | No | Yes | Yes | 4. No dividend payments | 1991 | 1990 | 1989 | Cash flow from operations | 3919 | 7000 | 3670 | Capital expenditures | 6031 | 4600 | 3650 | | No | Yes | Yes | 5.
Given: wages, salaries, and fringe benefits = $5 trillion; profits = $400 billion; interest = $300 billion; rent = $100 billion; and depreciation = $700 billion. How much is National Income? 7. Given: wages, salaries, and fringe benefits = $5.7 trillion; profits = $500 billion; interest = $250 billion; rent = $150 billion; and indirect business taxes = $400 billion. How much is National Income?
FI 515 Homework week 2. 3-1 Days Sales Outstanding Days sales outstanding= receivables/ave sales per day= receivables/annual sales/365) 20 days x $20,000= $400,000 3-2 Debt Ratio Debt ratio formula=Debt ratio +equity ratio=1 Equity ratio = 1/EM….the equity multiplier is 2.5 1 / 2.5 = .40 equity ratio Debt ratio= debt ratio +equity ratio=1 1-equity ratio=debt ratio 1-.40=.60%=debt ratio 3-3 Market/Book Ratio Market value per share =$75 Common equity =6 billion Number of shares outstanding =800M Market value per share/ (common equity/# of shares outstanding)= market/book ratio $75/(6,000,000/800,000,000) = $75/7.5 10 billion= market to book ratio 3-4 PE Ratio Price per share/earnings per share= P/E Price per share/cash flow per share= Price/cash flow
Return on common stockholders’ equity $29,946,992 - (2430872-15801332) / 200,000 = 82.9% * Solvency ratios 9. Debt to total assets $7,628,563 / 34,825,498 = 22% 10. Times interest earned 3,272,314 / 121,533 = 26.9 Riordan Manufacturing, Inc. Horizontal Analysis for the Balance Sheet Increase or (Decrease) 2010($) 2009($) Amount % Assets Cash $2,807,029 $1,511,253 $1,295,776* 46.1%* Account Receivables $2,695,342 $2,644,307 $51,035 1.9% Current Portion of Note Receivable $102,976 $117,475 ($14,499) (14.1%) Inventory $8,517,203 $7,123,790 $1,393,413 16.4% Deferred Income Taxes – net $0 $0 $0 0% Pre-Paid Expenses and other Items $402,240 $458,875 ($56,635) (14.1%) Total Current Assets $14,524,790 $11,855,700 $2,669,090 18.4% Liabilities Current Liabilities Current Portion of Long-Term Debt $474,032 $484,894 ($10,862) (2.3%) Accounts Payable $1,391,385 $1,636,923 ($245,538) (17.6%) Accrued
Sales units Sales Selling price: $250 100,000 400 Selling price: $250(0.1)= $275 137500 Variable cost: $160 variable cost: $160 Fixed cost: 22500 Fixed cost: 22,500(0.1)= 24750 1. Compute the company’s current break-even point in units and dollars? Break even Units: Fixed expense/CMUnit 22500/90 = 250 CM: 250-160= 90 Dollars: Fixed expense/ Cm ratio 22500/.36= $62500 CM Ratio: units 90/ $250 selling price = .36 2. What is the company’s current margin of safety in Units, dollars and percentage? Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted.
Income Statement figures for the most recent fiscal year Cost of goods sold Amount | Percentage of total revenue | $47,860,000,000 | 68.50% ($47,860,000,000/$69,865,000,000) | Reference: Consolidated Statements of Operations, Form 10-K, Page 31. Reference: Footnote 3 - Cost of Sales and Selling, General and Administrative Expenses, Form 10-K, Page 35. Reference: Footnote 11 –Inventory, Form 10-K, Page 42. Gross profit Amount | Percentage of total revenue | $22,005,000,000 ($69,865,000,000 - $47,860,000,000) | 31.50% ($22,005,000,000/$69,865,000,000)
Notes Payable | 12000 | | Interest Payable | 9000 | | Total Current Liabilities | 58500 | | Long Term Liabilities | | | Notes Payable | 28000 | | Total Liabilities | | 86500 | Stockholder's Equity | | | Common Stock | 205500 | | Retained Earnings - December 31 | 97400 | | Total Stockholder's Equity | | 302900 | Total Liabilities & Stockholder's Equity | | 389400 | Elker Fashions Incorporated Closing Entries For Year Ended December 31, 2008 Date | Account Title & Explanation | Debit | Credit | 31-Dec | Merchandise Inventory - December 31 | 80000 | | | Sales | 865800 | | | Purchase Discounts | 16400 | | | Income Summary | | 962200 | | (To record ending inventory and close accounts with credit balances) | | | | | | | 31-Dec | Income Summary | 860100 | | | Depreciation Expense - Buildings | | 12000 | | Depreciation Expense - Equipment | | 10000 | | Gas & Oil Expense | | 7600 | | Salary Expense | | 70700 | | Utilities Expense | | 11400 | | Repair Expense | | 5900 | | Insurance Expense | | 3500 | | Sales Discounts | | 6100 | | Purchases | | 720000
Case 2.3 Take- Two Interactive Software, Inc. Question 1. Financial Ratios Formula Used 2000 1999 1998 Age of A/R (365/AR turnover) 91.71 115.87 183.42 Age on Inventory (365/Inventory Turnover) 63.5 57.2 57.9 Gross Profit % Gross profit / Net sales 36.00% 29.70% 24.00% Profit Margin % Net income / Net sales 6.50% 5.30% 3.70% Return on assets Net income / Ave. total assets 8.60% 9.90% 8.70% Return On Equity Net income / Ave. stockholder's equity 18.3% 27.1% 30.20% Current Ratio Current assets /Current liabilities 1.41 1.28 1.3 Debt on equity ratio Total liabilities / Total stockholder's equity 0.88 1.72 2.08 Quality of Earnings Ratio Net operating cash flows / Net income -2.21 -1.03 -1.12% A/R Turnover (Net sales / Avg. AR) 3.98 3.15 1.99 Inventory Turnover (COGS / average inventory) 5.75 6.38 6.3 Red Flag 1: The major “Red Flags” would be the quality of earnings ratio. In this case, the quality of earnings for 2000 is -2.21, for 1999 is -1.03, for 1998 is -1.12 which is very low for an investment point of view.
Stock Number Annual $ Volue J24 12,500 R26 9,000 L02 3,200 M12 1,550 P33 620 T72 65 S67 53 Q47 32 V20 30 What are the appropriate ABC groups of inventory items? (4 points) Stock Number Annual $ Volume % of Annual Volume % of Total Class: J24 12,500 46.21 79.48 A R26 9,000 33.27 L02 3,200 11.83 19.85 B M12 1,550 5.73 P33 620 2.29 T72 65 0.24 0.67 C S67 53 0.20 Q47 32 0.12 V20 30 0.11 Total Annual Volume 27,050 Problem 2: Assume you have a product with the following parameters: Holding cost per per unit Order per order What is the EOQ? What is the total cost for the inventory policy used? (4 points) Problem 3: Assume that our firm produces type C fire extinguishers. We make 30,000 of these fire extinguishers per year.